How to Avoid going into Credit Card Debt at the Holidays

To avoid going into credit card debt during the holidays, do not spend more than you can pay. This may sound simple in words, but it just is not that easy in real life. The following steps can help you achieve this goal.

Understand how much you have to spend

Before you can avoid overspending on your credit cards during the holiday season, you need to know exactly how much you have to spend. Go through your finances, making sure to take into account both routine costs and those that may naturally pop up for emergencies and unexpected items. Come up with a general amount that you can spend during the holidays and still not going into debt. Remember that you do not need to spend all of that, but you should not spend more. Do not just use the amount off credit that you have on your credit cards but the amount that you will be able to pay off when the credit cards come due.

Make a budget

Now you need to make a budget for the holidays. Of course gifts may be the first cost that comes to mind, but there are many other costs, small and large, that can emerge. Sometimes what actually drives people into credit card debt during the holidays are those small things because you may not account for them when budgeting but they can add up. Some costs you may want to include are presents, charitable donations such as Toys for Tots or holiday food drives, increased eating out, parties you are hosting, items to bring to events, vacationing, travel expenses, the cost of hosting guests, etc. Include everything you can think of and add to it if you think of more as time goes on.

Assign numbers to each of the items on your budget. Try to be realistic because it is important to stick to the budget. Only use as much money as you have decided that you have available. Be as specific as possible. Do not just give a general number for gifts but instead assign a number or range to each individual present.

You may need to cut back at this stage. If you realize that you do not have enough money to go on vacation this year without going into credit card debt, then do not. If you do not have enough money for all of the presents you want to buy then talk to people about not exchanging this year or get a group to do a white elephant gift exchange.

Do not overspend on your credit cards

Once you have a budget it is time to use it. This is the part in which a lot of people go into credit card debt. You should stick to your budget. If you have to go over in one area, then compensate by lowering another.

Some people have trouble being disciplined when they buy. You may want to bring cash instead of credit cards, and just the amount that you need. You can only bring one credit card to the store so that you do not use more than you should. You may want to go to the store with a list and only look for the things that you need. Avoid browsing if you know that you cannot resist spending. Always keep on track of your credit card expenditures to make sure that they are not getting too high.

Your holidays may not be very warm if they propel you into credit card debt. The above tips can help you avoid this.