Most people set out to buy Christmas presents with the best intentions. It is very easy to get sucked in to overspending during the holidays. Many of the pitfalls in this area are completely avoidable if you arm yourself with the right information. It is essential to have a spending plan for this time of year. It is not too late to sit down and create a plan to make sure that January is not full of regret and sleepless nights.
Create a plan now
Now is the time to create a plan. Make a list of each person for whom you will be buying a Christmas gift. Set a spending limit for each person/type of relationship. For example, you will spend “this much” on kids, “this much” on your significant other, “this much” on your parents, etc. Not only does this help you plan, it takes some pressure off when you are deciding what to purchase for each person.
Do not get caught walking into a store without a plan. Millions of dollars per year are spent on buyer psychology and, eventually, the marketing in stores will suck you in.
Decide how you will pay for gifts
In a perfect world, you will pay for all of your gifts with money you already have. You will save throughout the year for the additional financial burden. However, things are not always perfect. Over 50% of Americans overspend with their credit cards during the holidays. In conjunction with the overspending, most people do not have an increase in income following the holidays so the additional financial burden can be quite difficult to overcome.
Do not be afraid to limit gift giving
Possibly more than ever, people are understanding of additional financial hardship right now. It is completely acceptable to limit gift giving to close family or completely refrain from it. You should not let pressure force you to put yourself in bad financial state. If you consider credit card interest, the risk may outweigh the reward in this case.
Avoid self-indulgence
Let’s face it, buying stuff for other people is fun. It is easy to get wrapped up in the moment and buy something for yourself. Things like coffee, lunch, gas, and moments of weakness can add up when you are out and about buying gifts. If you plan your route and exercise a lot of self-control, you could save yourself hundreds of dollars.
Do not let things get out of control
Credit card interest can get overwhelming in a hurry. Think about this: it is February and credit card bills are rolling in. You are making minimum payments, but those payments are only chipping away at interest. You are unable to make any meaningful payments. Now you have to make a drastic change to gain control of the situation. You take out a personal loan. You take a chunk out of your credit card debt, but many personal loans have higher interest rates than credit cards. Now your debt is off to the races. This is a dangerous and slippery slope and should be avoided at all costs.
Nothing spoils the holidays like daily harassment from creditors. If you find yourself with mounting debt from the holidays, you need the help of an experienced debt defense attorney. Elias Dsouza at Dsouza and Strachan Law group has the knowledge and experience to get you back on track. Contact Dsouza and Strachan for a free consultation today.