Ask an Expert: 10 Ways to Avoid Holiday Debt
Christmas is just around the corner, but there is still time to plan for gift exchanges that won’t cause credit card debt to skyrocket. Consider implementing one, two or several of the following tips.
* Reduce the number of purchased gifts. This is especially effective for children. Rather than buying gifts for family and friends, help children create service gift cards good for babysitting, watching a pet for a weekend, 1 dozen homemade cookies, etc.
* Pick up odd jobs for a few weeks. Find people who will pay to have their leaves raked, garden tilled or rain gutters cleaned. If you are handy with tools, there may be other jobs that can be done like chopping wood, building a shed, etc.
* Beware of shopping the TV networks. Professionals on commercials are trained to entice buyers. They are interested in getting you to buy; they aren’t interested in whether or not you need their product.
* Shop local. Perhaps some items on your Christmas list could be purchased for less in a larger city. However, watching sales close to home can save time and fuel costs. Consider that many who shop out of town will also spend money to eat out and are tempted to buy more when there is a larger selection available.
* Set a spending limit and stick to it. Traditions of buying expensive clothes, large tools, appliances, etc., can quickly run up the credit card tab. Also, do kids (and adults) really need the very latest tech gadget or toy?
* Spend on a gift that is an investment in your future. As a couple, consider giving each other the gift of an extra payment on your home mortgage. This could jump-start the desire to pay off your home sooner. Those who budget even $50 more each month to pay down the principal on their mortgage can take two or more years off the total due by decreasing the interest.
* Put on a “practical” hat when making your Christmas list. Socks, gloves, kitchen shears, towels, a welcome mat or a book are examples of practical gifts. Does the family you are giving to really need one more decoration for the home? Perhaps, if it has personal sentiments attached, but be thoughtful if you choose to go this direction.
* Consider size, shape and weight if you are mailing. Costs of shipping have gone up, even since last year. If you are sending gifts, perhaps a gift card is the best choice. It’s possible that the shipping costs may be more than the value of the gift. Some companies have electronic gift cards that can be emailed directly to the recipient.
* Start setting aside cash now. How many paychecks do you have coming between now and the holidays? For some it may be only two. Others could have as many as six. Could you set aside 5 percent from each paycheck? That could give you extra money to work with.
* Black Friday and Cyber Monday – are they worth the hype? Consider that the whole purpose behind these events is to jump-start consumer spending for the holidays. There may be one or two exceptional deals, but most people will be better off to simply stick to the original shopping list.
The above ideas don’t come close to covering the slew of suggestions available to help reduce buyers’ remorse and January credit card statement shock. Hopefully, however, they will assist in getting the creative juices flowing in deciding how to spend less this Christmas. For other suggestions to slash expenses throughout the year, visit http://extension.usu.edu and click on “Publications.” Then type “Slashing Expenses” in the search bar.
By: Kathy Riggs, Utah State University Extension professor, email@example.com, 435-586-8132
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