How to Set Realistic Goals to Avoid Holiday DebtDec 06, 2017
Are you determined not to add to your debt during the holiday season?
The first step to avoiding consumer debt during the holidays is being mindful of your finances. Revisit your financial goals for 2017 and consider whether any unexpected, extra expenses will negatively impact those goals.
The next step is to create a December spending plan that includes your holiday spending goals. Here are three goals that you may want to include this holiday season:
Goal One: Focus on memories rather than material things
Think about what’s important to you and your family over the holidays. If it’s really all about spending quality time with the people you care about, perhaps it’s time to introduce the idea of the No Spend Christmas. Instead of purchasing expensive gifts, focus instead on getting together with family and friends. Not only will you save money and avoid adding any unnecessary debt, you’ll also be focusing on what matters the most to you.
Goal Two: Don’t spend more than you can afford
If a No Spend Christmas sounds a little too drastic, you can still set a goal to avoid overspending by sticking to a holiday budget. To create a realistic holiday budget, consider how much you can afford to spend this year — without adding to your debt or affecting your other financial priorities like debt repayment or savings goals.
Once you’ve determined how much you can spend, use a holiday budget calculator to plan your spending accordingly.
Goal Three: Stick to cash rather than credit
Sticking to a holiday budget can be easier when you stick to cash only. If there are situations (think online purchases) where you absolutely need a credit card, be sure you can pay off that purchase in January. Avoiding credit and only using cash this Christmas makes it much easier to keep track your spending. You’ll also avoid any unwelcome post-holiday credit cards bills.