Plan ahead to minimize outrageous holiday debt





Debt is a four-letter word all year round. But if you’re dreading it even more as the holiday season approaches, you’re not alone. Faced with increasing layoffs and a weak stock market, many consumers are wondering how they can make the best of the holidays without plunging themselves into further financial liability. As the holidays approach, be sure to remember these tips:


Don’t neglect emergency cash reserves. When buying holiday gifts for loved ones and trying to avoid debt, it may seem difficult to save a little extra cash for emergencies. But if you have concerns about the country’s (as well as your own) financial future, having a little extra "breathing room" will help ease your mind and leave you with a reserve of money should you need it.


Set a holiday budget and stick to it. The quickest way to get into trouble is not knowing how much cash you have available before beginning your holiday shopping and entertaining. Now may be a good time to consider how you spend and celebrate your holidays and allocate money to plans that are representative of your lifestyle and budget. Take the time to establish this year’s holiday budget and resolve to adhere to it, no matter what.


Be creative about holiday entertaining and gift giving. In order to adhere to a tighter holiday budget, carefully consider the amount of money spent on eating out and entertainment-related activities. Renting movies and making dinner at home is much less expensive than going to the movie theater and will allow you to spend quality time with your family. Also, instead of going out with friends, consider inviting them over for a more intimate and affordable evening at your home. Chances are, they will appreciate saving money just as much as you do.


In terms of gift giving, consider gifts that will take your time but cost little or no money. Offer your babysitting services, for example, so friends can have an evening to themselves. If you want to give someone a gift, be creative. Make a Christmas tree ornament or frame a great family photo.


Although giving gifts from the heart can be more time-consuming, it can be much more rewarding for the recipients. Also, if you want to buy a gift for a child, consider a U.S. savings bond instead of cash. Not only do they appreciate in value, they teach children about the importance of investing.


Hold off on large holiday purchases. With layoffs and corporate downsizing becoming a harsh reality for many Americans, purchasing big-ticket items for the holidays might not be a good idea. Be practical about gift giving and holiday spending.


Shopping the sales after New Year’s will allow you to find better deals than during pre-holiday shopping.


This holiday season can be both enjoyable and affordable if you remain smart about your spending. Remember, taking a disciplined approach to alleviating debt is important during good economic times. With potentially tougher times ahead of us, it is more important than ever to plan ahead.



Leave a Reply

Your email address will not be published. Required fields are marked *