For credit card companies, Christmas is a wonderful time of the year. Each holiday season, American consumers charge billions of dollars to their credit cards, accumulating bills that can take a whole year or more to pay off. Often, expensive purchases are accompanied by debt. Most American consumers end up accruing debt over the holidays and, in doing so, set themselves up to pay big amounts in interest.
While the best way to avoid debt over the holidays is to pay for all your gifts with cash or a debit card, it can be hard to ignore the holiday spending urges. Here are three tips to avoid excessive debt this holiday season.
Create a Gift List and Budget Accordingly
A great strategy for avoiding debt is to make a short list of friends and family who are most worthy of a gift. Once you’ve compiled a list, decide how much you can spend per gift and stick to your budget. To avoid deviating from your plan, avoid impulse purchases. Before buying anything that is not on your list, give yourself a week to think about it. Usually, within this time frame, your impulse to buy a more expensive gift will pass.
However, the retail industry won’t make it easy for you. Retailers have become experts at encouraging shoppers to buy a more expensive item than they had originally planned. One tactic they use to do this is grouping related merchandise together either in their store or online.
For example, if you are going to buy a shirt that is $30, online stores will usually populate a “things you may like” bar underneath the item you were looking at. In this bar will be similar products that are normally more expensive by a small margin. In this example, that may be a sweater for $45. In your brain, you may rationalize purchasing the sweater by convincing yourself that for just another $15, you can get something much more valuable. This is the kind of thinking the retail industry is hoping to inspire, which can cause financial problems for shoppers. Try to avoid retail traps at all costs.
When you go shopping with your friends or family, it becomes easy to get distracted and buy things that aren’t on your list. It’s hard to stick to your plan if your friend is asking you to check out the sale section or encouraging you to try on an expensive dress. Shopping solo is the best way to stay focused on buying the gifts you had originally planned to purchase. While it may not be as fun, it will ensure you’re not paying off your gifts until 2025.
Save Throughout the Year
There’s nothing quite like watching family and friends open gifts they love. When people overspend on presents, it’s usually with the intention of wanting to give the best gift possible. To set yourself up with a larger gift-giving budget, it’s best to save money throughout the year for holiday shopping. This way, when the holidays come around, you’ll have the money you want to go big on gifts for your family and friends without going into debt.
Consult a Trusted Debt Settlement Lawyer
If you suspect your debt is getting out of control, you should consult with a trusted debt settlement lawyer. At McCarthy Law, our attorneys understand the stress of debt and the resulting financial hardship. Our team is dedicated to fighting for your financial freedom. To schedule a consultation with a knowledgeable and experienced debt settlement paralegal, call our office at (855) 976-5777 or fill out an online contact form.