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How to Keep Your Debt Low During the Holidays

By: Michael Millington

The holiday season is upon us, and that means more spending. For many, more spending during December is a common occurrence. With family members visiting, big dinners, decorations, gifts and more, credit cards and utility bills tend to be much more than any other month. As such, it can be easy to lose track of what you spend with the nature of the holiday. When special events arise, budgets can go right out the window. However, debts don’t stop just because of a birthday, anniversary or X-mas time. Once January rolls around, the weight of the holidays can come crashing down. Here are a few ways to stop your debt from getting out of hand in times such as these.


Actually Stick to Your Budget

For 11 months in a year you have a budget and you stick to it. December is no different. You might have to adjust your budget to incorporate the holidays, but remember to stick to whatever you decide. If you make extraneous purchases, you’ll be working outside of your budget and you won’t be able to accurately predict the debt you’ll be dealing with afterwards. Remember that January will signal a return to the norm, and that might leave you owing more than what you can normally handle. If you intend on spending more during the holidays, make a plan to do so. Spend less in the months surrounding that time frame, thus freeing up more money. Having a plan will keep debt from sneaking up on you.


Stick to Cash

Holidays tend to ride a wave of credit card use on the pretense that you’ll pay it all off later. However, that can come with its own set of issues. Credit cards with balances will accrue interest. Interest as a percentage will increase the more you spend. This can be detrimental for obvious reasons, so it would pay to not use credit cards all the time. If you use cash intermittently, your credit usage will be much less. This will save you money in the long run by lowering the amount of interest you pile up over the months. Plus, you’ll be more responsible with your actual money than you will be with your credit.