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Plan, give and spend wisely to avoid holiday debt

Create a budget, consider giving memorable “experience” gifts, and look for savings by using your cards’ points when buying.

Want to avoid holiday debt? Set a budget

Want to avoid holiday debt? Set a budget and stick to it, experts say. Photo Credit: Getty Images / elenaleonova

The holiday season is supposed to be about joy, giving and spending time with our favorite people. But just as you might pack on a few extra pounds over the holidays, you might pack on some extra debt, too.

If you don’t have a holiday savings fund stashed away, smart planning and clever shopping can ensure you don’t end up struggling to pay off debt.

  • Make a plan— and stick to it. If you go to the mall without a spending plan, you can rack up debt.

Really set a budget: In the 2016 holiday season, nearly a quarter of Americans surveyed didn’t have a gift budget, according to the online Harris Poll of 2,135 U.S. adults conducted in October 2017. Figure out how much you can spend, and think beyond presents. Factor in other expenses — gift wrap, holiday cards and meals, to name a few.

Limit your list: With your overall holiday budget in mind, decide whom to buy for. Your immediate family and close friends are probably nonnegotiable. But do you really need to get presents for all of your co-workers, neighbors and the Amazon delivery person?

  • Give creatively. Clothes and gadgets are good go-to gifts, but they can be expensive.

Give moments: Consider giving experiences, such as a “certificate” to an inexpensive or homemade meal together or a day at an amusement park. Memories may last longer than the latest gadget, and, as a bonus, this lets you spread out holiday expenses instead of stuffing them all into one month.

Get crafty: Homemade gifts can lend a more personal touch while saving you money. They don’t have to be complex, like a hand-knitted sweater. Search online for inexpensive DIY projects, such as photo collages or baked treats.

  • Spend smarter. Use credit card points: Check out your card issuers’ online malls for opportunities to use your points to buy gifts without spending money.

Compare prices before buying: Shop around and make sure you’re getting the best deal. If you’re in a store, open a shopping app to see what the price is online (but factor in shipping). When shopping online, search for promo codes.

Watch prices post-purchase: You may still have a shot at a lower price even after buying, using a store’s price-match policy or your credit card’s price-protection feature.

Leave the plastic at home if you know you’re likely to overspend.

Hold a gathering in lieu of gifts: If you can give only to family this year, suggest that your friends gather for a potluck, cheap white-elephant exchange or other inexpensive activity. There is often relief across the board if you say, ‘Don’t buy me anything.”

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