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Don’t Go Into Debt With Your Holiday Spending

holiday spending
Christmas is just around the corner and many people are beginning to stress about their holiday spending. It is important, however, not to go into debt trying to make everyone happy this holiday season.

Many people go into debt trying to live up to Christmases past.

Many people go into debt purchasing gifts for Christmas, myself included. Usually the reason for this is because they are trying to live up to Christmases past. If you had a great year financially and it is followed by a tough financial year you may feel like you are lacking when it comes to gifts for Christmas. Do what you can, don’t stress about living up to last Christmas or the Christmas before.

Don’t overdo it… Buy what you can afford.

If you can’t pay cash for (or pay off in full) what you want to buy this Christmas, don’t buy it. There are plenty of programs, like Layaway at Walmart and Kmart, that can help you make payments on items if you really want them. This is a much better alternative than racking up credit card debt celebrating Christmas. Remember, the gifts you buy will bring joy to others, however, if you ruin your credit buying them you will resent having purchased it in the first place.

Don’t max out any credit cards you can’t pay off in full in January.

I am totally guilty of doing this. I was a 20-year-old who absolutely LOVED Christmas and had been approved for a Discover credit card, Amazon.com credit card and a PayPal credit card. All three of which were maxed out the first Christmas I had them. I bought my boyfriend at the time an Xbox, games and a number of other items. My grandmothers and grandfathers, brothers, mother, dad and dad’s wife all got great presents as well. However, I was not able to pay all of that off for almost a year (with interest) and it ended up dinging my credit score more than it helped it.

Christmas can help your credit score… If you do it right.

A few days ago I heard a friend of mine say that she takes out a loan for holiday spending every year. To me this was astounding (and it may seem odd to bring up in a posting about not accruing debt this Christmas)! How could someone take a loan out and repay it every single year just for Christmas. She says that taking the loan out insures that her family, including her three children, get what they want every year for Christmas.

The loan, as she explained to me, is relatively small $2,000 to $3,000 each year. It has actually helped her credit score tremendously and she is able to “do” Christmas to the fullest.

Whatever your plans for holiday spending are this year, make sure that you are fully aware of your finances and don’t overspend/rack up debt to have a nice Christmas. After all, the season is about enjoying friends and family, not gifts.

Photo: Jim Lukach