Don’t Buy Christmas On Credit – Set a Christmas Budget

gifts for Christmas

Did you go out and shop on Black Friday? Are you on the hunt for the best deals on must-have gifts this holiday season? If so, you’re likely a smart consumer and will save a lot of money on the presents you purchase. However, it doesn’t make sense to put those purchases on a credit card and rack up debt that will only carry over into February. If you’re like 83% of the population, who won’t pay off the balance in one billing cycle, your efforts fighting the crowds and standing in line may be in vain! In fact, if you paid cash or used your debit card for the purchases when they weren’t on sale, you could probably make out even better!

The Pressure to Spend

One of the things that makes the holiday season so stressful is the overwhelming pressure to buy. Let’s face it—you can’t afford to spend vast amounts of money on shopping at any other time of the year, so why do you think it’s possible at the end of the year? Only about 22% of people start an annual Christmas savings account, which financial analysts say is a great idea. The other 78% of us scramble to figure out how to afford those $200 designer jeans for our teenage daughter. It doesn’t help that everywhere you look, people are talking about spending money and buying gifts.

It’s the truth—if you put all of your Christmas shopping on a credit card, you’ll end up ruining your blessings in the New Year. You’ll likely end up paying more than you should when you factor in interest and late fees. And since you can’t predict the future, you might be setting yourself up for financial problems should a crisis arise in the coming months. To make matters worse, you could still be paying for those jeans next Christmas!

How to Avoid Debt This Holiday Season

So what should you do? Like everyone else, you want to put nice gifts under the tree, make your loved ones happy, and see that sparkle in their eyes when they open their presents. But how can you achieve all of this without going into debt?

Here are some tips to help you avoid buying Christmas on credit, as well as to plan better for future holidays:

  • **First and foremost, create a budget.** If you have three or four kids, decide on a reasonable amount of money to spend on each one. Keep in mind that most kids forget what they received by the time Valentine’s Day rolls around (which is right when the debt will hit you!).
  • **Reevaluate your Christmas tradition.** If a “good Christmas” is about giving and getting the “best” gifts, you’re missing the point. Instead, shift the focus from the gifts to the togetherness and deeper meaning of the holiday.
  • **Don’t be afraid to go handmade.** Handmade gifts are often more heartfelt and meaningful. Rather than buying a $30 scented candle, for example, make a dozen candles with your children to give away as gifts.
  • **Make a list BEFORE you go shopping.** Retailers know you’re likely to impulse buy during the holidays. It’s hard to resist all the special sales and promotions, but stick to your list and commit to only buying what’s on it. This can save a lot of money in the long run.
  • **Bring cash.** Cash makes you more conscious of what you’re purchasing and helps you stick to your budget. When the cash is gone, you’re done shopping. In fact, leave your debit and credit cards at home while Christmas shopping.
  • **Make sure your children understand expectations.** Even if they believe in Santa, it’s important they know that the sky isn’t the limit. Many people overspend on credit because they think their kids will be disappointed if they don’t get exactly what they wanted from their lists.

And if you find yourself in this cycle every year, start a new tradition this year by putting money into a Christmas savings account with each paycheck. This account should be inaccessible through your debit cards so you won’t feel the holiday pressure next year. You might also want to consider giving fewer gifts. Many of the presents we give are never used or appreciated by the recipient. Is it really worth putting them on a credit card just to show up with a gift? Experts say no—and you should too!

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