Keeping Credit Under Control at Christmas
Ahh, it’s that time of the year again, when our thoughts turn to Christmas decorations, carols, gatherings, tasty treats, and, of course, shopping. It’s a wonderful time, full of fun and festivities, but it can also be an expensive time. Between buying gifts, decorating your home and preparing all the special foods, you can end up spending quite a lot on Christmas-related things in the month of December.
Before you get caught up in the excitement of the season, and in the process, get caught up in the spending, consider this. With credit card in hand, it’s easy to shop ’til you drop without blinking an eye. After all, you want to make the holidays perfect, right? But while buying great gifts, making amazing meals and decorating your home to the hilt may be fun at the time, paying the bills you racked up creating that perfect holiday won’t be as much fun.
There’s a lot of pressure to spend, spend, spend around the holidays, and it’s easy to succumb to it, rationalizing that you can pay it all off after the holidays. That’s often easier said than done. This season, instead of spending now and regretting later, you could take control of your credit card and avoid the after-Christmas debt blues.
Know Your Limits
You may have a credit card with a spending limit of $5,000, but that doesn’t mean you should spend $5,000. If your budget is a squeeze to pay for groceries, utility bills and regular expenses like private health insurance, then how will you pay back that Christmas shopping money if you put it on credit? You could end up taking a long time to pay off your Christmas purchases, which may mean paying hundreds of dollars in interest.
We all have a basic idea of how we’re doing financially, even if we don’t really want to admit it. As the holiday season begins, take a look at how you are doing and begin thinking about how much you really can afford to spend. This may not be easy, I know. I wish I could spend more on gifts for my family, but I simply can’t, at least not without going too far in debt.
Set a Budget
As you look at your financial situation and begin planning your holiday spending, set a budget. If you have some money saved up to spend, that’s great. Begin with that amount. If you know you are going to have to put some purchases on a credit card, consider how much you can pay off in the few months following December. You don’t want to spend so much that you’ll have to pay it off over a period of years. Keep your credit card spending to a reasonable amount that you can expect to pay off in a comfortable amount of time.
As you work on your budget, make a list of everyone you want to give gifts to, and set an amount you plan to spend on each person. If you go to the mall with only a list of names and no idea of how much you can afford to spend on each one, you may end up spending more than you mean to.
Shop With Cash
One simple way to keep from spending more than you plan to is to shop with cash. Leave the credit and debit cards at home, grab your list and your cash and start shopping. Stick to your budget and when the cash runs out, you’re done shopping.
I know that if I only have a certain amount to spend, I shop more carefully and look for better deals. And going Christmas shopping and paying in cash feels great. You aren’t worried about how you’ll pay for it later.
Shopping with cash is a really good idea when it comes to making less expensive purchases. Little gifts for friends, stocking fillers and such. You may think that it’s fine to put those small items on your credit card, but the problem is that those small items begin adding up. If you charge $20 here, $15 there, and $25 there, then soon you may have spent over $100 and aren’t really sure where that money went. So consider leaving the credit cards at home, and give shopping with cash a try.
Get Creative
It seems to me that gifts get more expensive each year. With so many high-tech gadgets and gizmos on the market, it’s easy to want to buy lots of gifts that cost $50 to $100. But not everybody can afford that, no matter how generous-hearted you may be. And is buying the latest, coolest tech toy really what Christmas is all about? Don’t fret about rushing out for the best deals on the latest products. Instead, get creative and put some thought and effort into your gifts. After all, it’s the thought that counts.
Get creative when it comes to gift giving. You don’t have to spend a fortune to give a great gift. Make cookies and create a cookie box, or combine some spices to create a spice tea mix. These and other homemade goodies make great gifts, and they aren’t that expensive to make.
Focus on the Future
Christmas is a wonderful time of the year and it’s easy to get caught up in the excitement and hustle and bustle of the season. But as you enjoy the holidays, don’t let your spending get out of hand. Know your financial situation, set a budget, shop with cash and get creative if necessary when it comes to gift giving. If you don’t do these things, you may end up with more debt than you can manage. Make sure you plan ahead for a happy New Year without a struggle to pay your bills.
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