Thursday, November 17, 2011

How can you dodge that Holiday Debt?

Sure, the holidays were a lot of fun. You ate great food, spent time with family, and you gave and received some fabulous gifts. Fast forward a few weeks to mid-January. You just got your credit card statement from December and it's not pretty. Although the season was grand, your bank account is looking quite anemic. All that giving and celebrating caused your finances to take a major hit. Here are five tips on how to recover from your holiday debt hangover. —By Sheiresa Ngo

Have a game plan because Holiday Debt is real.  It hits too many of us and even though we are in an economic crisis you may find yourself still wallowing in one yet again!  We try and tell ourselves to plan, prepare, save and even cut back on our upcoming shopping for the holidays, but that's not always easy when you get caught up into the season. 

I've decided to share some saving and smart tips for keeping ourselves OUT of this vicious cycle. 

1.   Set spending limits.
Sounds easy enough and it is if you actually write down or compile some sort of list.  Taking it along with you is also key so having it on a virtual notebook on your phone or technology device is even better so you have it handy when you are out. 

2.   Shop online.
Shopping online has several benefits and I've listed a few.
   a.   Allows you to comparison shop since you can check out sales from numerous stores right from the  comfort of your home.
   b.   Many retailers have special sales just for online shopping that are sometimes much better than in the stores.
   c.   Free shipping is becoming a staple feature during the holiday shopping.  Lots of stores are also having free shipping to a local store and all you have to do is pick it up.

3.  Set aside money for gifts.
I know, I know.  It's easier than it sounds but no one says you have to start at the beginning of the year and no one says you have to save up the entirety of what you plan on spending.  You can start in mid summer, or even after the kids go back to school.  You can also save up just what you want to spend on Black Friday.  It's totally up to you, your budget, and your wallet. 

4.   Don't go above 30% of credit card balance.
It's just smart to keep those credit card balances low.

"The debt you carry on a credit card in proportion to the balance is called a “utilization rate,” and credit bureaus respond more favorably to people with low utilization rates. The lower the utilization rate, the better your score.
You must keep your credit card balance below 30 percent month-round. Maintaining a higher balance, but paying the bill below 30 percent at month’s end is not a sufficient strategy. Credit card companies want to know that you consistently live within your means, so you must always shoot for the 30 percent target." http://www.720creditscore.com/

5.   Be creative with your gifts and give services.
No, not goofy stuff that you wouldn't want, but sometimes a service is a better gift.  Learn who you are shopping for and figure out if providing a service for them wouldn't be the better idea.  If the person has kids give them a few free days of babysitting.   Wash their car a few times or even housecleaning.  Who wouldn't want that?  It's definitely something to consider.

6.   Donate to their favorite charity in their name.
Now not everybody would want this but if you know that this person donates regularly or feels strongly about a particular charity donate in their name and see them light up. 

7.   Secret Santa
Why just do it at work?  It's a cheaper way to give gifts and give people what they actually want.  If you are spending a nice amount on just ONE  gift only, you are saving by not getting everyone a gift.  This works well with big families with tons of kids.  Not immediate family but extended family can enjoy this.  Nothing worse then seeing one rich family member get EVERYONE something when most can't afford to do this.  This way no one is embarrassed and everyone gets something.

These are just a few practical ideas for keeping you out of Holiday debt.  I plan on using them as well and hope it helps.  Let's bring in the New Year with happiness and being Holiday debt-free!

Enjoy your holidays Naturals,

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