Wanting to give the people you care about a Christmas present is honorable. The least sexy thing to think about during this season is debt. However, keeping debt in mind could be essential to ensuring you aren’t paying interest for the next 6 months.
How Much Debt Did U.S. Shoppers Take on in 2018?
According to an article on MarketWatch, 44% of U.S. shoppers assumed more than $1,000 in debt this Christmas. The average amount of debt is $1,054. 5% of these shoppers racked up more than $5,000 in debt. This is a 5% increase from last year.
If a person racked up $1,054 in debt and paid a minimum of $25 per month, they would be paying off the balance until at least 2023.
Ways to Avoid Christmas Debt in the Future
The best way to avoid Christmas debt is to make a list of people you know you will buy presents for and create a budget. Then, stick to that budget. Other ways to avoid accumulating Christmas debt are:
- Making sure you do not impulse shop. Those last second decisions can be costly and they are outside of your budget.
- Buying things online. You are able to compare prices much more easily online than in-store and you can see what in-store prices are.
- Paying up front for everything you can. Do not put yourself in the position to pay off interest down the road.
- Buying Christmas presents throughout the year when sales arise. Companies know when people are shopping last minute and they often raise prices to capitalize on desperation.
- Considering gifts that are thoughtful rather than expensive.
- Defining spending limits with your family, spouse, and friends.
Buying Christmas presents is not a bad thing even for people with limited spending money. The key is to be smart about it. If you miscalculated or even just went all out in 2018 and overextended yourself, you may need help getting back on track. Elias Dsouza is an experienced debt negotiator. Contact Elias for a free consultation and put yourself back on track.