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The holiday season is the most wonderful time of the year. It is also the most expensive season of the year. It’s the time of year when so many people get into holiday debt.

Many of us spend on credit cards or borrow money through more expensive options like payday loans to spend on holiday purchases. In fact, according to USA Today, Americans get into an average of $1054 of debt during the holidays every year. 

The holiday season should be a time to enjoy your family and friends instead of stressing out over holiday debt. We all want to give our family and friends gifts that they are going to love. But you also need to make sure that you can also give yourself a gift this Christmas. And a debt-free holiday season is the best gift you can give yourself this year.

Here are 9 ways to stay out of holiday debt this season

Make a Plan

Make a plan for how much money you can afford to spend as well as how that money will be spent. Planning ahead is always the best practice when dealing with your finances, including staying out of holiday debt. First, make a list of all the people you want to buy a gift for.

Set a maximum amount you are going to spend on each of these people. You can also write down some gift ideas that you intend to buy for each person on the list. Now make a list of all other expenses that come with the season. Will you be hosting a party at your home? This is a big expense that you need to work into your holiday budget.

What about a gift for the host of a party you might be attending? Include that nice bottle of wine in your budget. Then there are those secret Santa parties you might have at work, what about your kid’s school and team parties? Then there’s the holiday decor and travel expenses.

Try to anticipate all the expenses that are going to be coming your way this holiday season. Total up the amount you’ll be needing and create a budget. This is the Christmas budget planner I use to stay on top of the expense of the holidays. 

Christmas Budget Planner

Set a Budget and Stick to It

Once you total up all your expenses, you need to make a budget and stick to it! First of all, is the amount you totaled realistic? If not, then go back to the drawing board and see where you can cut back. Seriously, you need to set a realistic budget for this holiday season without relying on credit cards and loans.

It is easy to get caught up in a spending spree during the festive season as our emotions run high during this time of year. You need to create a plan and stick to your budget to make sure you do not get into holiday debt. 

How much money will you have available to you by the time the holiday season rolls around? If you have a holiday spending fund or Christmas club account established, then you have a good idea of what will be available to you; as well as how much you can save between now and the holiday season.

If you haven’t been saving for the holidays, you are going to need to hustle to put some money aside. Take the total amount of all your expenses and divide that number by the number of weeks left until Christmas. This is what you need to aim to save weekly to cover your expenses and avoid holiday debt.

Holiday Savings

If you haven’t been saving for the holidays, then this is something you should consider doing going forward to avoid having to hustle to stay out of holiday debt. It’s much less stressful on your budget when you set aside a small amount of money every week all year.

Once you’ve made it through this season, set up a special savings account and deposit a set amount of money into it every single week. Set up direct deposits into your account to set your savings on autopilot.

It’s much easier to save smaller amounts for a longer period of time then trying to do it all in a matter of a few months. I recommend opening an account with an online bank simply because they pay you more interest than a traditional bank.

At the time of this writing, CIT Bank pays the highest interest on savings accounts. Why not earn the most money from your savings?

Open a CIT Bank savings account today to help pay for holiday spending & earn money for the holiday season.

How to Fund Your Holiday Budget

Once you have determined how much money you will need to budget weekly for the expenses of the holidays, you’ll need to figure out where this money is going to be coming from. Do you have a surplus in your budget that you can dedicate to the holidays?

If you don’t then things will be a bit more difficult but not impossible. Let’s look at some ways we can find money to finance the holiday season.

Cut Spending (If Necessary) on Your Holiday Expenses

You may need to buy budget-friendly, i.e. less expensive gifts, or cut people off your list to spend within your limits based on your budget. In addition to cutting back on gifts, take a look at all other expenses you listed. Are there ways you can cut back or totally get rid of?

If you do not want to trim your holiday spending, you will either need to increase your income or cut back on your regular monthly expenses to fund the holiday expenses.

Track Your Spending

Tracking your spending on your holiday budget is very important. It is super easy to overspend on holiday shopping. Department stores use many tricks to get shoppers to overspend so stick to your list and track what you buy and how much you spend.

By tracking your spending, you will be much more likely to stick to your holiday shopping list and spend within your limits.

Check out this article to see how department stores get you to overspend

9 Hacks To Get Out Of Debt Faster

Use Cash

Because holiday spirits run high, impulse purchases can bust your holiday budget. Consider carrying cash when Christmas shopping so you can control your spending. It’s really difficult to overspend when you don’t have the means to pay for unnecessary expenses.

Cut Out Unnecessary Expenses

If your budget does not allow you to stash much money away as savings for the holiday season, take a serious look at other things you spend money on every month.

Try having a no spend week/month to help fund your holiday expenses. How about shopping your pantry and freezer to cut back on your grocery budget for a few weeks?

How about cutting out some unnecessary spending on things like expensive Starbuck coffee? Maybe you can brown bagging your lunch instead of going out to lunch during the work week. There are many small changes that you can make to help save up and avoid holiday debt.

Make Extra Money

If you’ve done everything you can to cut back on your holiday expenses, and find ways to save money, but are still falling short, then you’ll need to find ways to make extra money to cover your holiday expenses.

Here are some great ways to bring in a bit of extra money for the holidays or all year long.

In Conclusion

As long as you make a list, create a budget and stick to it, you should be able to celebrate the holiday season without worrying about holiday debt.

Get your Christmas Budget Planner today!!

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