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Holiday Gift Guide

Ducking The Holiday Debt Monster

Accruing debt seems to be as much a holiday tradition as singing carols or decorating the tree.

Most holiday shoppers find themselves in some kind of debt once the holiday season has come and gone.

And if they’re not careful, they’ll still be paying that same debt by the time the next holiday season rolls around.

For shoppers still reeling from a past holiday season spent swiping cards in the hunt for that perfect gift, exercising restraint and responsibility is likely an absolute necessity.

Fortunately, there are some easy steps to take that can save you money and keep your loved one’s faces smiling come the holiday season.

•Keep track of what you’re spending. The “swipe the card now, worry about it in January” approach to holiday spending is a great way to riddle yourself with debt.

Far too many holiday shoppers lose track of how much they’ve spent.

Simply keeping the receipts is not enough. Know how much you’ve spent, and how close you are to staying under or going over budget.

•Shorten your list. While it might seem as though it’s customary to give every acquaintance at least a little something each year, it’s not.

A thoughtful card is sufficient for acquaintances whom you don’t see very often or friends who have fallen out of touch. Keep your money for the people you see on a regular basis.

•Seek out extra income. Holidays are busy times for almost everyone, so you might be able to give yourself some spending relief by logging a few extra hours around the office.

If not, seasonal employment opportunities are abound come the holiday season, when many companies need extra help to combat the heavy shopping season.

Since you won’t be needing this extra income to pay your typical monthly bills, use it expressly for holiday shopping, or save it up until after the holiday season and use it to pay off the first wave of post-holiday bills.

•Pay with cash. This is perhaps the biggest problem holiday shoppers run into: putting it all on plastic and sorting it out later.

If you have the cash to pay for a gift, use cash, as there’s no interest rate on cash purchases.

When using plastic, you’re essentially acknowledging you’ll be paying more for an item than you would if you simply used the cash in your pocket.

Interest charges add up quickly, and if a credit-card balance isn’t paid off immediately, they add up continually as well. Paying with cash, however, means you won’t have to worry about checking the mailbox for bills come January.

If you must use a credit card and have more than one to choose from, use the one with the smallest interest rate.

If you need to make multiple charges and have multiple cards, try limiting each card to one purchase.

And the best bit of credit card advice is, if you do rely on them for shopping, pay off the bill in its entirety once it arrives. This way you’ll definitely avoid accruing interest charges.

• Shop early. When you leave all your holiday shopping to the last minute, you’re more inclined to overspend, as you don’t want to end up giving a bad gift or come up empty-handed.

By shopping early, you’re capable of seeking out the best deal and, as an added benefit, you’ll also be less stressed, having avoided the last minute rush.

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