With Christmas quickly approaching, many people are figuring out how to purchase their Christmas gifts without blowing their budget and falling into debt. While giving is a great way to make your friends and family members happy, the consequences of giving more than you can afford usually comes back to haunt many of us in January, when the first credit card bills are received. Here are some tips on how to create a Christmas budget and avoid debt.
The most important thing you should remember is that you shouldn’t have to go into debt to please the ones that you love. If you can’t afford a specific gift, then choose an item that is more affordable. Your friends and love ones would rather see you financial healthy than in debt due to gifts.
One way you can avoid debt this Christmas is to create a budget for gifts this year and stick to it. Unfortunately, it is just not enough to give yourself a rough estimate to stay within. Make sure to realistically come up with an amount that you will spend. Simply stating that you will only spend $200 on presents for all your friends, family members and co-workers might not be realistic, choose an amount that it is feasible, too low and you will feel guilty for easily surpassing it, too high and you might not restrain yourself from needless spending.
There are several strategies that can save you lots of money this Christmas season. The first strategy is to use a debit card instead of a credit card. Debit cards debit money from your bank accounts instead of borrowing it from a bank or credit card company. The upside is that debit cards are just as convenient, but do not require you to pay any interest on payments you make. This can easily save you hundreds of dollars a year in high interest fees.
If you intend to use a credit card this season, make sure you choose wisely, you might want to choose a card with either a low interest fee or apply for a card that has no interest for six months. Choosing your credit card carefully can also save you hundreds of dollars a year in interest fees.
Finally, another great way to shop this Christmas is to do research online. If you know what you would like to buy for someone, research online where it costs the least amount of money. In most cases, you can easily shop online from the privacy of your own home, save money and purchase the items that your friends or family members want most.
This Christmas season, don’t dig yourself into a hole with debt. By following the above tips you can make sure that you avoid the common debt trap that so many fall into year after year. Remember to shop smart, reduce the amount of purchases you make with credit cards and create a realistic budget. Doing so will usually result in saving hundreds of dollars over the course of the year.