Holiday Debt

The holiday season can be a time filled with joy and happiness as families come together. Regardless of what holiday you celebrate during December and January people tend to exchange gifts and companies look forward to this season to make the majority of their income for the year. As a society, we continue to spend more and more during the holidays and this has resulted in over 1/3 of Americans going into debt this holiday season resulting in an average owing of $1249. (https://www.cnbc.com/2021/12/29/more-americans-took-on-holiday-debt-this-year-owing-an-average-1249.html) To some, it may seem foolish to go into any debt at all in order to purchase gifts for others but the answer isn’t always that simple. There can be a number of pressures during the holiday season whether you want to get your kids the newest console or fly to see the family that you haven’t seen in a while you may not always have the funds on hand to do it.

Tips for Avoiding Holiday Debt

The best way to avoid the worst is to prepare for it. When you are preparing your budget it is important to allocate funds towards gift-giving and especially flights if that is going to be a part of your holiday plans. In circumstances like these, it is important to budget more money than you believe is necessary. You never know what obstacles may occur during the holiday season. Delayed flights, out-of-stock gifts, and many other issues can result in extra out-of-pocket costs. Setting a budget and actually following it are two very different things. Once the budget is set it is important to follow it as closely as possible, it is important to be able to say “no” in certain circumstances. Family members will appreciate you regardless of how expensive or inexpensive your gift is. It is the thought that counts. You may feel compelled to give more to family members or they may have certain expectations for what type of gift they should receive. In these circumstances, you may need to get creative. Look at buying gifts early and look for deals often. Avoiding the holiday season rush can be essential to saving hundreds of dollars on gift shopping. It may also be necessary to get creative with gifts. Considering free gifts, being more selective with who you give gifts, or baking gifts are all ways of saving money during the holiday season.

Recovering from Holiday Debt

Whether you followed the tips for saving money and fell victim to extra costs or simply spent too much money this holiday season you may have accrued some holiday debt. Recovering from holiday debt is a similar process to recovering from anything. The worst thing you can do is beat yourself up for it. What has happened has happened and we have no control over the past. The only thing we can do is control the future. In order to make sure the overindulgence during the holiday season doesn’t occur again steps must be taken today. Set a budget. Pay off your debt as quickly as you can. Begin preparing for future events. Budgeting does not only apply to the holiday season, it also applies to birthdays, trips, and other events you will have to spend money for.

        For more personal finance information make sure to check out Instagram @therichcollegestudent. If you have any suggestions for topics make sure to leave them in the comments and leave a like if you enjoyed reading.