Staying Out of Debt During the 2020 Holiday Season
The holiday season is full of temptations to spend money. If you have deep pockets and spending money lavishly, spontaneously, and often during the holiday season is in your financial plan, then that’s your prerogative. But for the average American, spending lavishly, spontaneously, and often during the holidays is not a good idea. In fact, a significant number of American households struggle to stay out of debt (or to avoid getting MORE in debt) every year during the holidays.
Americans Tend to Spend More During the Holidays Whether they Have More or Not
On average, Americans spend about $1,500-2,000 during the holiday season. And many put it on credit cards. 61% of people who already carry credit card balances, plan to add to their deficit during the holiday season. 35 million Americans entered the last holiday season with debt lingering from the previous year’s holiday season.
Avoid Temptation and Stay Out of Debt During the Holiday Season:
- Make a Plan: You don’t have to stop giving gifts to friends and family during the holidays, but make a plan for your expenditures. Know what gifts you are buying and consider the cost for the gifts. Planning ahead of time can be extremely helpful both for budgeting purposes, and for helping you stay on task (and on budget) while shopping.
- Pay Cash: Many retailers offer special financing during the holidays to tempt shoppers into spending more money. Instead of falling into the trap of adding to your deficit, pay cash for your gifts.
- Prioritize Gift Lists: Prioritize your gift list and specify a budget for each gift.
- Minimize the Costs: Consider creative ways to minimize the costs of giving gifts. Can you pick up a freelance job to make some extra cash? Do you have items around the house that you can list for sale online? Can you make gifts for coworkers, clients, or your kids’ teachers?
- Consider “Free” Gifts: Consider giving gifts of service that don’t cost you anything, but may mean substantially more to the recipient. Offer to watch your nephew’s new baby for a night while he takes his wife out or gift a recent college graduate with a free resume edit or design. Whatever your talents are, share them.
- Spend Bonuses Wisely : If your employer provides a bonus at the end of the year or specifically for the holidays, spend it wisely. Set it aside to use on gifts and avoid any “extra” expenditures from your regular income that will leave you strapped (or spending on credit).
- Don’t Go Off List to Get a Good Deal: Stick to your list even if you see an amazing deal. There will always be another massive sale. Don’t get sucked in to purchasing a bunch of stuff that you aren’t looking for just because it’s on sale.
If you are one of the millions struggling with lingering holiday debt from year to year, and you need to file bankruptcy , please don’t hesitate to get in touch with Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.
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