4 steps to reduce holiday debt


There’s a magical vibe in the air this time of year, but that magic comes at a price. Every year the pressure to spend more to have the perfect vacation grows.

This high-cost season can leave you in debt. According to NerdWallet’s 2022 Holiday Shopping Report, his 31% of 2021 US holiday season shoppers who used credit cards to pay for gifts still haven’t paid off their balances.

With some planning, you may be able to avoid holiday debt. But even if you have some credit card balance over budget, there are ways to limit the damage to your finances.

1. Start with a plan

If you’re hosting a party, start with a budget and gift list and grocery list. Shopping apps and web browser extensions make it easy to track price trends, compare prices from different merchants, find coupon codes, and earn cash back.

Online shopping is becoming more and more overused, not only because of its convenience, but also because of the improved user experience on merchant websites.

Emily Rassam, senior financial planner at Archer Investment Management in Charlotte, North Carolina, said: Rassam curbs the urge to spend by adding items to her cart when she finds them, but only once a month does she review the cart and make a final purchase decision. If you take a moment between finding an item and sitting down to buy it, you may reconsider your selection and remove some items from your cart.

2. Watch out for sneaky costs

Don’t forget the small details like decorating and gift wrapping. Reuse what you can. If you have old gift bags in your closet, now is the time to shine. Latham recommends looking for deep discounts on these items as soon as his holiday season is over.

Hosting parties and hungry houseguests are now more expensive. According to the Bureau of Labor Statistics, food costs at home increased by 12.4% from October 2021 to October 2022.

Beth Moncel, founder of Budget Bytes, an online resource for learning how to cook on a budget, suggests sticking to simple holiday menus that are cheap to make. “The classic recipe is simple, doesn’t require fancy ingredients, and is still perfectly delicious. Especially when you add a little butter,” Monsell said in an email. It’s an easy way to make any recipe just a little better!”

3. Create a New Year’s debt repayment plan

If you have debt during the New Year holidays, add paying it off to your list of New Year’s resolutions. There are some actions you can take to keep yourself motivated.

— Reduce interest payments: Consolidate high-interest debt into account transfer credit cards and personal loans. Note, however, that while these products can help you reduce your interest expenses (under some conditions), they don’t address why you borrowed money in the first place. They can just be helpful when you try to pay it back.

— Cut costs and attack debt: As we head into the new year, take a look at your most recent credit card and bank statements to see where you can cut back. Savings achieved this way can be applied towards credit card payments. If you receive cash gifts or holiday bonuses at work, use these funds to pay off your debts.

— ask for help: Financial professionals and non-profit credit counseling agencies can help you get a handle on your overall financial situation so you can take action. Maybe, but with some unbiased advice, it’s easy to get started.

Americans are obsessed with buying things, but consumerism doesn’t make us happy, and it’s contributing to climate change, says NBCLX storyteller Chase Kane on his climate change. We’ll cover that in the next part of our survival guide. With supply chain issues making this holiday shopping season even more challenging, try alternative gift ideas such as experiences and second-hand goods.

4. Start planning for next year

Heath Carelock, program director of the Center for Financial Empowerment at Prince George’s Community College in Lago, Maryland, cites his mother-in-law’s diligence in planning vacations year-round as a way to avoid debt. . “She starts her savings for the holidays from her New Year’s Day. She’s trying to buy all her Christmas presents by August.”

Carelock suggests shoppers take advantage of holiday sales throughout the year. If you know the sale is coming up, hold off buying until then.

By spreading out your holiday expenses, you can compare shopping, find great deals, and avoid large credit card bills right away. “It’s slow-burning, as opposed to conflagration,” Carelock says.


This column was provided to The Associated Press by personal finance website NerdWallet.


What do you think?

Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

Leave a Reply

Santa Sightings 2022: Where to find Santa in Will, Grundy counties this year

Kanye news: Adidas to launch investigation into allegations of inappropriate behavior against Ye