How to Avoid Debt During the Holiday Season
- Author: Bryan Miller
- Posted: 2024-05-24
Buy Gift Cards Instead of Presents
One of the major ways that you get yourself into financial trouble during the holiday is that you overspend. Yes, that sounds very obvious, but that statement should also be the basis for how you correct the problem. Shopping with your credit cards is convenient and easy, but then you also lose track of how much you spend and end up running up large amounts of debt.
One way to avoid the debt trap is by purchasing gift cards for yourself to use ahead of time and then using them as your top line number for how much you will spend. In other words, you buy gift cards based on your overall holiday budget for the year. You can then buy your presents for other people using the gift cards that you bought for yourself. Alternatively, you can give others gift cards instead of buying presents because you then avoid the temptation to buy many individuals presents that add up in cost.
This is one disciplinary check on your spending that can keep you from going over your budget. Some credit card issuers may even give you rewards points or cash back for the gift card, although not every credit card gives cash back for gift card purchases.
Compare Prices Before Major Purchases
When you are in the store and you see something that is advertised as being on sale, things are not always as they appear. Just because a retailer says that something is being sold does not mean that it is a good price. Many people buy things because the price seems too good to be true and they have to have. Then, they look back later and realize that the retailer found a way to creatively advertise something as half off when it was in reality regular price.
The lesson to be learned here is not to buy something just because it looks to be on sale. Yes, there are some prices that you should jump on because they may be the lowest prices of the year. Yet, you should only reach these conclusion after verifying that the price really is low. Write down or take a picture of the price when you are at the store and then go online to compare. You can even do this on your mobile device when you are physically standing at the store. Many people end up in credit card because they spend too much, but you can cut the amount of debt that you take on when you get the best possible price.
Join the Gig Economy or Work Retail
When you have some form of side hustle, you are able to earn the extra money necessary to keep you out of debt. With just an hour or two extra each day, you can earn the extra spending money that you need that can finance some or all of your holiday shopping. The great thing about the rise in freelancing is that there are so many different opportunities available, including one or more that likely fit your skillset.
There are also seasonal jobs available at retail stores that are part-time and should be able to fit within your existing schedule. This is especially true when the economy is strong and retailers have difficulty finding qualified employees to fulfill their needs. With a side job, you work as much as you need to in order to pay your holiday bills. While it is stressful and tiring to work two jobs, being in debt is even more angst inducing so this is clearly the lesser of two evils.
The holidays do not have to end with debt. With either some planning, extra labor or a combination of both, you can end the holidays in healthy financial shape without a debt hangover affecting you in the New Year.
