If you have it in mind to spend just how much you can afford, here’s a few tips to assist you avoid credit card debt during Christmas and throughout the holiday season.
1. Create a Written Budget
A written budget could be one on paper or in a computer. The most important thing is having a something to look at and refer to. Creating a budget isn’t an easy task but should be a collective one. Request the attention of your spouse and the both of you should sit down and decide how you want Christmas to look like – without exempting if your family is going on vacation or not, and presents for the kids.
In your budget, itemize all expenses and place them according to an order of importance. Less important items should placed bottom while those very important purchases should remain on top.
A mistake families often make is creating a budget solely for Christmas purchases. This is wrong as if not properly monitored; you could go in debt from other sources. In this regard you should incorporate every purchase (including your recurrent expenditures such as groceries and family supplies) to be made throughout the period into your written budget.
2. Stick to the Budget
Staying out of debt this Christmas will only come if you’re dedicated to living within your budget. You wouldn’t want to go into a new year in debt, would you? Make sure you stay on course and if necessary, let your kids know why there’s no excess cash to spend.
3. Don’t Forget to Pay In Full
If your budget is going to be charged on a single credit card, you’ll probably have a higher amount to pay at the end of the month. Make sure you’ve planned for this accordingly as late payments usually attract higher interest applied over an extended period, sometimes throughout the lifetime of the credit card. If possible, spread out your purchases over those credit cards charging the lowest interest.
4. Keep Good Records
Record keeping is one vital tool that’s important when staying out of debt. Ask family members who’ll be making the purchases to keep record of all items bought. To make it easier, you could have everyone gather every other day to give an account of items purchased and obtain receipts to be kept in an expenses file. You never know, this could be the period someone with your Personally Identifiable Information charges a purchase to your credit card. You need to know what you’ve spent to know what you haven’t.
Compare your card statements with receipts and other records of purchases. 1If there’s a disputable charge no matter how small; contact your credit card company immediately.
5. Make Wise Decisions
The secret to making wise decisions this Christmas is making collective decisions. With the help of your spouse and the mature children, you should make decisions that fit into your budget. Pay little attention to a favorite son pressuring you to buying a fancy laptop, or a daughter in need of an expensive bracelet. You should say ‘Yes’ unless it’s cheap enough for you to pay for it in full at months’ end.
Instead of going on a vacation that’ll put you $10k in debt, why not check out for much cheaper alternatives? The internet is a lovely tool for this.
6. Make It a Priority to Stay Debt Free
Just like getting out of debt requires motivation within you, not getting into debt also requires you to be motivated against it. Make it priority to stay out of debt this Christmas. If you’re already in credit card debt, read the posting on credit card debt and motivation.
In staying out of credit card debt, you might consider relying on other forms of payment excluding your credit card. Although these may require more supervision to keep purchases documented and within the budget, cash and prepaid cards are a preferred option as you won’t compile debt and there’ll be no interest to be incurred.