The holidays are the most wonderful time of the year, but for many, the pain of a New Year’s Eve hangover is nothing compared to the credit card hangover they feel when their December credit card bill arrives. Here are five tips to get maximum enjoyment out of the holidays without the unfortunate aftermath.
Track your spending
It’s easy for holiday purchases to add up to an unexpectedly high number if you aren’t keeping a close eye on the total. By tracking your spending, you know exactly what you’re dealing with and you’ll be less likely to go overboard by mistake. Here are options for tracking your holiday spending:
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Pen & paper
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Notes app on your phone
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Spreadsheet
Don’t overspend on the small stuff
The holidays bring so many opportunities to spend that your purchases can really add up. For that reason, you should identify what is most important for you to spend on and resist the pressure to dish out money for things you don’t care about as much. The definition of what is unimportant will vary by person but some of these things might qualify:
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Holiday decorations
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Host/hostess gifts
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Party favors
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Holiday cards
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Wrapping paper
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Christmas cookies
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Gift exchanges
Stick to cash
It’s much harder to overspend when you keep to a cash-only budget because when you run out, you’re done. Plus, that tactile feel of cash makes it psychologically more painful to spend money. But sticking to cash can be difficult in an increasingly online shopping environment so if you’ll do most of your holiday shopping online, you can instead set up a checking account just for your holiday purchases and stick to shopping only with the debit card from that account.
Make weekly credit card payments
If you prefer to use a credit card for your purchases, keep up with your spending by making weekly payments. Add up your purchases for the week and make a payment in that amount or wipe your balance completely clean each week. This will keep you conscious of how much you’re spending because it will be reflected in your checking account more regularly. It prevents you from having a large surprise credit card bill at the end of the month.
Have difficult conversations
If credit is your only option for covering your holiday expenses, you might need to tell loved ones or friends that certain expenses aren’t in your budget this year. While it can be uncomfortable to initiate those conversations, your future self will thank you when your next credit card bill arrives.
