Money & Career

4 secrets to avoiding holiday debt

Author: Canadian Living

Money & Career

4 secrets to avoiding holiday debt

Everywhere you look is temptation to whip out the credit card and drown yourself in even more consumer debt. But there are ways to avoid using plastic this holiday season -- or, at least, to use it right. Ideally, assuming your goal is to avoid more debt, the credit card shouldn't be used at all. Need support? Here are four tricks to help you spend smart.

1. Avoid temptation
If reaching for the credit card is a habit when shopping, whether the purchase in question is planned or not, then try just leaving the card at home. You might feel a little naked without it, but you'll get used to not having a card with you. Instead, consider carrying cash when you shop -- just enough to buy what's on your list.

2. Beware of debit
Not using your credit card doesn't give you license to wildly use your debit card -- after all, spending is spending. If discipline is a problem, consider asking your bank to lower your daily spending limit. Most cards have a daily limit of $500 to $1,000, depending on your history and the amount of money in your account. Cap your limit if the temptation to spend is too great.

3. Recognize external pressures
Retailers want you to spend, and every time you step into a mall or a store there are triggers that weaken your willpower. For example, have you noticed that milk and other everyday needs are often in the back of grocery stores? They're there to make you walk the entire length of the store so you'll be tempted to spend more. Similarly, cute yet pointless items are often right by the cashier, so when you're getting ready to pay -- or waiting in a long line -- they can grab your attention. Spending a couple of bucks on a cute trinket never seems like a lot -- but remember, every dollar counts. Recognize the pressures, breathe and avoid them.

4. Stick to your list
Once you've decided what gifts and groceries to buy for the holiday season, work to stick to your list. If you have to switch things up, don't just make an impulse decision. Eliminate the original gift, look at your budget, see if the new item fits, then go ahead and purchase.

Walking with cash, capping your spending limits and knowing how retailers work to get you to spend are all tools in your arsenal as you continue to pay off debt and avoid adding more. There's no reason you can't have a great holiday without spending past your budget.
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Money & Career

4 secrets to avoiding holiday debt

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