How to Avoid Holiday Debt

The holiday season always puts additional pressure on the finances of a person. Holiday shopping may encourage you to spend more than what you can afford on your credit cards. But you should consider exercising discipline and preparing a budget for your holiday shopping because credit cards give a strong illusion that you can buy more than you can afford.

Credit Card Shopping Results in Spending More

This is a proven and established psychological fact. Till you do not see and deal in actual currency, using a piece of plastic to pay for purchases removes the realization of spending actual money a little bit. People always tend to spend more on their credit cards, unless they are not used to using it in the first place.

Credit Card Purchases Cost More

You should limit the expenses you make on your credit card during the holiday season because what ever you buy on credit card is going to end up costing much more if you take a few months to a off the balance on your credit card. The money that you pay additionally as a interest charges will raise the additional cost of the shopping. Your credit score might also suffer if you run your credit cards up with a high balance and come close to their maximum credit limit.

Save Money for Holiday Shopping, not Credit

In order to avoid holiday debt issued try and save up for the expenses rather than rely on your credit card during the season. You may start saving up for the holiday season as early as you like.

Set a Budget for Holiday Shopping

Before you go out to shop set a budget on how much you’re going to spend. Shopping on a credit card can make it easy to lose track of how much you are spending. Having an actual amount of cash will result in you spending exactly put you have and nothing more.

Make a List of What to Buy

Make a list. Make a list of what you need to buy and stick to it. Stately ignore biggest sales offers and advertisements. Do not get lured into buying something simply because you are getting one free when you buy two of them.

Use Cash

Carry cash. As already mentioned when you carry cash you are limited to what you have. If you carry the exact amount of money that you intend to spend from home you will not go beyond your planned budget. Having a credit card at hand or several of them can easily make you overspend. If you think you cannot afford it don’t buy it. It is easy to get swayed in the euphoria of holiday shopping. If you have doubts as to whether you can afford a certain purchase do not make it. Paying by credit card for something that you cannot afford to buy with cash right now, you are delaying the eventual.

Whatever you buy on your credit cards today you are going to pay from your income tomorrow. Avoid making purchases that you will take the next few months or even until the next holiday season to pay off.