If glitzy ads and the scent of evergreens entice you to choose debt when you mean to choose joy, your holiday may already be haunted by the Ghost of Christmas Yet to Come.
Twenty-eight percent of shoppers who used credit cards to pay for last year’s holidays are still paying for them. Think about how long you’re willing to pay for a moment of delight before whipping out the plastic.
Bob Sullivan, author of “Gotcha Capitalism,” says paying off gifts over two or three months “is not the end of the world.” But giving up entirely on your budget is a mistake, says Sullivan, who likens it to overindulging at the table. A couple of excesses can be undone in January. Abandoning all restraint could take longer to reverse.
1. Separate it out
Sullivan says the best way to handle holiday debt is to isolate it. If you typically pay off cards every month, he suggests putting overspending all on one card (you can even do this after Christmas, if you get a 0% transfer card) and paying the others as usual. This helps you keep track of holiday debt and preserves the grace period — the time you’re essentially being loaned money interest-free — on your other cards.
2. Seek out the best price
Another way to keep holiday spending in check is with apps and websites that help you get the best price, says Lynnette Khalfani-Cox, author of “Zero Debt: The Ultimate Guide to Financial Freedom.”
3. Be aware of spending triggers
Khalfani-Cox says you can avoid debt by recognizing marketing techniques that trigger spending. For instance, “framing” — placing an item that’s in some way superior next to the one you came for — can make overspending seem smart. “I could think, ‘Wow! I am getting a TV that is twice as good for just 30% more,’” she says. And “grouping” makes impulse purchases feel necessary because of the way they’re displayed (think cases for electronics, scarves that match a sweater). Even that holiday atmosphere itself: Retailers know nostalgia can loosen your grip on your wallet.
4. Make use of returns
“I’m a big fan of returns,” Khalfani-Cox says. For example, the toy you thought would delight your child but is still in the box five days after Christmas is a prime candidate. And if an aunt bought an item you already have, the duplicate goes back.
Take a look at your own gifts, especially if your holiday shopping included some “one for you, one for me” items. Some could be candidates for return.
5. Sell what you no longer need
If Santa leaves electronics under the tree, resell the ones they replace to help reduce debt.