Navigating Holiday Shopping Without Falling into Debt Traps
The holiday season is a time of joy and celebration, but it can also be a time of financial stress and anxiety. With the pressure to buy gifts, decorate, and host gatherings, many people find themselves overspending and facing a mountain of debt in the new year.
To help navigate the holiday shopping season without breaking the bank, certified financial educator Tamara Dervin, founder of Money Basics, shares some valuable tips on how to set and stick to a budget.
Dervin emphasizes the importance of starting with a budget. Before you start shopping, take stock of how much money you have available for holiday expenses, including any rewards or perks you may have accumulated from credit cards. By setting a budget upfront, you can avoid overspending and stay on track with your finances.
Next, make a list of all the gifts you want to buy and their associated costs. Don’t forget to include additional expenses like parties, decorations, and holiday meals. If your planned spending exceeds your budget, be prepared to make some tough decisions and cut back on non-essential items.
When it comes to paying for holiday purchases, Dervin warns against using credit cards to buy things you can’t afford. With high interest rates, carrying a balance on your credit card can quickly spiral out of control and leave you in a cycle of debt. Similarly, be cautious of buy now, pay later services like Klarna and Affirm, as missing a payment can result in costly late fees.
To help keep track of your holiday spending, Dervin recommends using budgeting platforms like EveryDollar or YouNeedABudget. These tools can help you stay organized and accountable for your expenses, ensuring that you don’t overspend and end up in financial trouble.
By following these tips and staying mindful of your budget, you can enjoy a stress-free holiday season without the worry of post-holiday debt looming over you. Remember, the most important gift you can give yourself this holiday season is financial peace of mind.