5 Ways to Avoid Debt During the Holidays

Are you a Santa or a Scrooge when it comes to the holidays?
If you’re like the average American, you spent around $780 on Christmas gifts last year.
But with the majority of Americans having little to no savings at all, it’s a wonder as to how they plan to pay for this expensive holiday season. Before you go reaching for that credit card, here are five ways to avoid going into debt during the holidays.

Save throughout the Year
My personal approach to saving for the holidays involves stashing away money from every paycheck into a savings account designated specifically for Christmas spending. I typically put between $25 and $50 from every paycheck into our Christmas fund. This helps pay for all holiday-related items, such as decorations, the tree, Christmas cards, postage, and of course, gifts. Having around $700 stashed away helps me avoid the worry of wondering how I’m going to pay for everything, and better yet, helps keep these purchases off my credit card!
Instill an Emergency Christmas Savings Plan
If you’re thinking there’s less than 10 weeks before Christmas and you don’t have 26 paychecks left to save in a holiday fund, then try what many Americans do: which is to start saving now. By contributing just $50 a week toward your savings goal, you could still amass around $500 by Christmas—a decent enough chunk of change to help you pay for the holidays credit card-free.
Start Gift Shopping Now
If the idea of saving between $50 and $100 a week before Christmas seems too daunting, start your Christmas shopping now instead. Sometimes the idea of putting money aside for savings is harder than simply buying physical gifts instead.

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Take advantage of sales to start setting aside gifts now.
Use Credit Card Rewards
If you’re one of the few Americans who can use credit cards responsibly and pay them off in full every month and reap the benefits of credit card rewards, Christmas is the perfect time to cash in on your reward points. I redeem credit card rewards for gift cards to give to family members, or for gift cards to specific stores where I can then shop for gifts in person with the gift cards. Sometimes, I simply make gift purchases on my credit cards and redeem my points for cash rewards to pay for the credit card purchases.
Limit Your Gift Giving
Let’s be honest—do you really need to give worthless coffee mugs and candles to everyone in your office? Take a good hard look at your gift-buying list and find ways to trim the excess. Instead of exchanging the same old gift basket or box of chocolates with co-workers, how about suggesting a Secret Santa? Maybe ask family to limit the gift buying to the little ones in the family instead? Instead of buying gifts for neighbors, how about making baskets full of home-baked goods?
Think outside the box and don’t be afraid to offer less expensive alternatives in order to reduce your Christmas spending this year. Chances are others will be just as grateful to save some dough.

This post was published by Erika Torres, for » ReadyForZero.
ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.


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