Holiday spending is notorious for causing the household debt to jump dramatically. After all the fun of gift giving and receiving, and holiday trips and parties, the remaining holiday debt tends to make bill paying a serious challenge. Paying off debt is something that should be planned for the same as the gifts and trips are planned. A few common sense tips can really help keep the new year as joyful as the holidays themselves.
Set a budget for holiday spending
Most importantly, set a budget. By the end of the year, most people should have a pretty good idea of what the monthly household debt is running. Bill paying is easily one of the top priorities for anyone, so look back at the checkbook or bank statements and get a solid estimate. From there set the budget for holiday spending. Then ask yourself if you can realistically handle that much holiday debt. It’s not the price of the gift, but the thought, so don’t loose sight of the meaning of the season and find yourself paying off debt for years to come.
If you’re using credit to fund your holiday spending, keep it all on one account. It’s much easier to handle a repayment plan if you’re only using one account. Multiple accounts are where people get in trouble paying off debt. And definitely make sure it’s the card or account with the best interest rate.
Don’t wait until the last minute to shop. This is when holiday spending gets out of control. Household bill paying must go on. Waiting until the last minute usually means holiday debt goes up. Take time to shop around. Get the best deal, and watch out for internet deals. Check that shipping and handling. Would it be cheaper to drive to a local store and pay a little more up front?
Make a plan for paying off holiday debt
Finally, set a goal for when holiday debt will be paid off. Based on that goal, set the monthly minimum amount of the bill you’ll have to pay and commit to it. If you can pay more, always do! The secret to paying off debt is paying more than the minimum. The secret to staying out of debt is to keep holiday spending in check. No need to be impractical. This is a rough economy, and everyone will be struggling to make ends meet. A frugal gift giving strategy really isn’t such a bad way to celebrate the real meaning of the season.