5 Tips For Staying Out Of Debt During The Holidays

Although it has been billed as "the most wonderful time of the year", if you spend too much for those "Silver Bells", you could set yourself up for a "Blue Christmas". There are strategies to avoid overspending and all it takes is a little planning and a lot of will power. Here are 5 suggestions for avoiding holiday debt.

1. Create a budget
Evaluate your monthly expenses and decide how much cash you will have left over for the holidays. Remember that the holidays actually begin with Thanksgiving and run through New Year's Day. In addition to buying gifts, you should also consider all of the extra expenses associated with travel, hosting friends and relatives, and how many extra meals and get-togethers you'll be having.

2. Make a list and check it twice
Beware: the holiday buying season begins in earnest on November 1st. That's right, like black magic all of those Halloween items that filled the shelves just yesterday are replaced with twinkle lights, stocking stuffers, and last minute gift ideas. To dodge impulse buying and the bargain hunting frenzy that puts us on the path of overspending, it's best to have your budget and holiday gift list prepared well in advance. Since everything you buy during this time are actually extras, you should include them all on your list including greeting cards, wrapping paper, outdoor decorations, and even that little black dress for New Year's Eve. To keep your list realistic and within your budget, compare prices online, that way you will be a savvy shopper and able to recognize a good deal from a bad one.

3. Save up
Most of us have to cut corners and save up for the extra spending that occurs during the holidays. The idea of the annual "Christmas bonus" used to be something that many Americans counted on. However, tough economic times have changed things and now it's up to the individual to find ways to save extra cash for the holidays.

4. Avoid credit card debt
If you have to use your credit card for a purchase, chances are you can't afford it. We've all been there, envisioning how happy this really big gift is going to make our special someone. We don't really have the cash for it, but oh come on, tis the seasonInstead we should try to envision the finance charges that will roll in by Valentine's Day.

According to the American Consumer Credit Council, the typical U.S. family spends $935.00 over the course of the holidays. The ACCC also reports that most Americans have three credit cards and hold $15,799 in annual credit card debt. The holidays come but once a year - imagine how wonderful it would feel to have $15,000 towards a down payment for a home, an extra mortgage payment, or home improvement project!

5. Keep it simple
Even during the holidays, less is more. Creating a budget, and sticking to a list are easier when you look for alternatives to excessive spending from the start of the holiday season. There are hundreds of resources in print and online for ways to be creative and spend less.

Stick to your plan, and unless you are grocery shopping or purchasing a specific item on your gift list, it's best to avoid stores (including those online!) all together.