As the holiday season approaches, generosity and gift giving are probably on your mind. The financial backlash of consumer debt may not be. Don’t get lost in the shopping frenzy. Take the November Challenge and avoid overspending on gifts.
Avoiding Consumer Debt While Holiday Shopping
If you usually find yourself in hot water after the holiday season trying to manage credit card debt, the November Challenge is for you. It’s a wonderful thing to be generous, but unfortunately there truly is a fiscal limit to your generosity. Here are the steps you need to take to stop buying beyond your means and avoid consumer debt.
Step 1: Set a Budget for Gifts
The first thing you must do is set a shopping budget. Take a look at your finances to determine how much money you can actually spend on gifts rather than guessing. This amount should not come from room on your credit card; it should be money you have currently in the bank that is not already going toward other expenses.
Let’s say between your savings account and cutting back on entertainment, you will have $400 to spend on gifts for 10 people. That means you can spend $40 on each person. Maybe your meanest sibling gets less, but you have $40 if you need it!
Try using ACCC’s Holiday Budget Worksheet as a guide.
Step 2: Sticking to the Budget to Avoid Consumer Debt
Now that you have a budget, it’s time to shop. Temptations will be everywhere so you may need a few tips to keep focused. Here are a few things you can try to keep you on target, reach your holiday shopping goals, and say no to consumer debt.
- Use an all or mostly cash budget instead of credit
- Make a list of recipients, the items or price point you intend to spend
- Scope out sales ahead of time to save money
- Remember that your gift’s value doesn’t revolve around the price tag- it’s the thought that counts
- DIY- make gifts, regift or give the gift of your time if you have a low budget
- Remember to factor in gift wrap, cards and other packaging items to the budget
Whether you have $50, $200 or $400, you will still be able to give gifts during the holiday season and avoid consumer debt if you use a budget and shop wisely. If you do find yourself in trouble after the holiday season, it’s important to be proactive and recover your finances quickly so credit card debt doesn’t continue to accumulate.
To speak to a credit counselor today about budgeting and managing your finances, call 800-769-3571.