By  Updated on Fri Dec 6, 2013

Money Chat: How Do You Avoid Debt Over the Holidays?

Money Chat: How Do You Avoid Debt Over the Holidays?

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The holiday season is a joyous occasion, a time in which it’s better to give than receive. However, when it comes to spending, things can quickly spin out of control, and buying that gift for every person on your list can create an ugly black hole in your finances.

This week, the team sat down to share how we keep the peace in our own financial lives when it comes to this expensive season.

Kat: Okay, I have a couple of different methods I use, one is that I use my debit card exclusively to do my shopping. The downside is that I’m losing out on reward points I could be collecting by using my credit card. But this way I keep my debt under control by only using what I have. When it comes to online shopping, I make sure a use a portal, like Ebates, or my bank’s portal to get cash back.

Claire: That’s interesting, do you do a lot of online shopping?

Kat: I do actually, which I never really thought about before. In store I’ll tend to use my debit cards, and online I’m usually placing a bigger order for free shipping, so then I’ll use my credit card, selectively. I’ll pay my balance off days later, because I hate letting debt sit there and accumulate. If I don’t have enough in my checking, I’ll transfer money from my savings and replenish it with my next paycheck, plus add on to it.

Claire: That’s a good system, as long as you remember to replenish! How about you Theresa?

Theresa: So, I’ve never actually been in debt because I tend to use cash for all my purchases, and I also practice good habits like saving in advance. But when it comes to holiday shopping, I’ll prepare, make a list like Santa Claus, and estimate how much I can spend on each person. Then, I plan my gifts so I know what everyone is getting, and I have a budget. If I choose to get my mom something bigger, then I take the money out of my sister’s, haha!

Claire & Gerry: What?!

Claire: Wait, so you take money out of your sister’s account for other people’s gifts?

Theresa: No!

Kat: Haha, her gift, that’s what she meant.

Theresa: Yeah, like I’ll take some of what I’ve allotted for my sister and then move it to another person’s gift. First, it’s me, then family and friends, and then my sister. Just kidding!

Claire: Haha, yeah I was going to say! How about you Gerry?

Gerry: I also stick to some basics, like making a budget and a list, and also, I put my credit card in a drawer at home before I go out, so to resist temptation. That way I’m prevented from spending what I don’t have.

Claire: Oh, that’s a good one!

Gerry: Yeah, usually if I go out with my card, I’ll just say forget it and deviate from my plan by taking it out and spending more that I wanted. But this way, I don’t overspend, and I also check my balance daily or weekly. It’s a good habit to have, because it grounds you by showing exactly how much you have.

Theresa: Ooh that makes a lot of sense.

Kat: Yeah, it’s true, that’s a smart habit to practice.

Claire: Well, for me, I save with a couple of ways. I love online shopping, because when I shop at places like Amazon or eBay, I’ll always find items for a cheaper price. Also sometimes, I get ideas from physically going to a store, and then I’ll go home and look for a better deal instead of buying it right then and there. Another thing I started recently doing is weaning myself off using my credit card for small purchases. It just stops me from letting debt rack up, and having monthly balances that don’t get paid off right away.

Kat: How about any holiday ideas?

Claire: For the holidays, I tend to give most people edibles like sweets or food. Then, I make a list of the people I want to get gifts for, and make a budget, like Theresa and Gerry do. But, my family likes to do Secret Santa, which is great for saving money since you only have to buy for one person.

How do will you avoid overspending, this season?

 

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