Beat holiday hangover debt

Four Tips to Help You Stay Out of Debt During the Holidays

Keeping a Lid on Christmas and Holiday Spending
Here are four simple steps to help you stay out of debt this holiday season and avoid that financial "holiday hangover."

Set spending limits--Look at your monthly budget and figure out how much you can realistically afford to set aside towards holiday gift giving, without going into debt. Your intentions may be good, but the reality is that most people have a depressing amount of debt after the holidays and are not able to pay it off in as timely a manner as they had hoped.

Make a list--Follow Santa's example. Make a list of all the people you need or want to buy gifts for, including small gifts for babysitters, teachers, newspaper deliverers, etc. These small gifts can add up and are often the cause of going over your gift budget. Include money you'll spend on Christmas cards, postage, holiday parties, decorations, holiday entertainment, etc.

Set a limit--Decide how much you will spend on each person on your gift list, then add everything up and make sure it doesn't exceed your overall spending limit. Try to allow a cushion for unexpected items or price fluctuations.

Decide where to shop--As important as deciding what you're going to buy is deciding where you're going to buy it. If you don't wait until the last minute, you'll have time to comparison shop. Prices fluctuate significantly from store to store and from one month to another. Stores start cutting prices 10 to 25% on holiday items like decorations, gifts, and winter clothing the week before Thanksgiving (4th Thursday in November). As Christmas approaches, some items are marked down as much as 40% but selections are limited. You'll need to decide whether price or selection is more important to you and time your shopping accordingly.

Follow these simple steps and you'll avoid the nagging feeling that you've overspent on Christmas or other holiday gifts. You'll also avoid the struggle to pay off the credit card bills for months to come. Instead you'll feel in control and free of the dreaded financial "holiday hangover."