The holidays are right around the corner but you should try to avoid overspending during the next few weeks.
Here are five tips to keep you from going into debt:
Create a holiday budget—A budget for your holiday spending should keep you from buying more than you should. Make a list of what gifts you plan to buy and how much you’ll spend on each person. Also, consider how much you’ll probably spend on eating out and on host or hostess gifts for any parties you attend. Creating a budget is easy but sticking to it will be more difficult.
Dip into your savings—If you have funds stashed away in a savings account or GIC, you may want to consider using some of that money for some of your holiday spending. This is an absolute last resort and it’s a much better alternative than ending up with high-interest credit card debt. If you do overspend, you can set up a separate a high-interest savings account to prepare for next year. If you transfer just $80 to that account every month, you’ll have nearly $1,000 to spend on gifts, parties, and possibly even a small vacation.
Use your rewards points—Collecting credit card rewards points is very easy if you spend a lot. But if you’ve been racking up points for months or years and haven’t spent them, it’s time to put them to good use. Redeem those Air Miles or Aeroplan miles for electronic or regular gift cards, or use the cash you’ve earned on a cash-back credit card to help pay for any gifts you purchase.
Arrange a gift exchange with friends/family—While you’ll probably feel obligated to give all of your friends and family when you see them at holiday get-togethers, consider organizing a Secret Santa gift exchange instead. You won’t have to spend as much money and you’ll save a lot of time by doing a lot less shopping.
Regift—Regifting was popularized in an episode of the ‘90s sitcom Seinfeld. It’s an easy way to give away something you received to someone else. Hopefully, they’ll like that scarf or sweater more than you do. Before you decide to regift, there’s one major rule you should follow: Ensure the person who gave you the gift from doesn’t know the person who receives the gift. Also, the gift should be new and in its original packaging.
- How to Create a Budget
- 3 Ways to Improve Your Personal Finances
- What Should You Do When Student and Credit Card Debts Spiral Out of Control?
Flickr: Laura Bittner