The magic of the holidays is in the air, unfortunately that magic comes with a price tag. And spending money to create perfect holidays can leave you with debt that sticks around. About a third (31%) of U.S. holiday shoppers who used a credit card to pay for gifts last year still haven’t paid off their balances, according to NerdWallet's 2022 Holiday Shopping Report.
With a little planning, you can make sure that doesn’t happen to you. These tips can help limit the debt you rack up this holiday season.
- Start with a plan - Begin with your gift list and budget, as well as a grocery list if you’re hosting any parties. Online shopping can make it easier to overspend because of the convenience, but shopping apps and web browser extensions can help you track and compare prices, find coupon codes and even earn cash back.
- Watch out for sneaky costs - Little things add up, like decorations and gift wrap, so reuse what you can, including all those old gift bags in the closet. Hosting gatherings and feeding hungry houseguests is getting more expensive too, with the cost of food at home increasing 12.4% from October 2021 to October 2022, according to the Bureau of Labor Statistics. So look for simple holiday menus you can make on a small budget and don’t require fancy ingredients.
- Create a debt repayment plan for the new year - If you do get into holiday debt, add paying it down to your New Year’s resolutions. Reducing interest payments by transferring the balance of a high-interest credit card to one with lower interest can help.
- Start planning for next year - If you start shopping for holiday gifts early in the new year, you’ll be able to take advantage of sales throughout the year. Spreading out your holiday spending gives you time to comparison shop and find deals so you can spend less overall.
Source: CBS News