The holidays are a time for family, friends, and, unfortunately, debt. According to a recent report, the average American consumer racks up about $1,000 in holiday debt. This debt can be difficult to pay off, especially if you are already struggling with other types of debt.
No matter what your situation is, it is possible to avoid holiday debt. By following the tips in this article, you’ll be well on your way to staying out of financial trouble. We’ll cover a handful of the ways debt experts recommend for staying debt-free this holiday season.
Tips For Staying Out of Debt on Black Friday
With all the Black Friday and Cyber Monday sales, it can be tempting to spend, spend, spend. But there are plenty of ways to avoid debt on these two big shopping days. Let’s run down some of the top tips from debt experts about how to avoid debt on Black Friday and Cyber Monday sales this year.
Make A List and Avoid Impulse Buys
Start by making a list of who you want to buy gifts for, including any major purchases you might consider for the household. Often, deals can be found on home appliances and other big-ticket items, potentially saving you thousands.
That can make it tempting to impulse-buy, so thinking about your spending priorities ahead of time can help prevent falling into debt. Saving money is always good, but not if it costs you more in the end due to high-interest charges or burdensome payments for the rest of the year.
Plan Ahead for Discounts
Another way to avoid holiday debt is to take advantage of sales and discounts and only buy what’s on sale. Black Friday and Cyber Monday are two of the biggest shopping days of the year, and many retailers offer deep discounts on their products.
Rather than buying items at full price, always opt for items that come with the largest discounts. This way, your money will both go further as well as help you steer clear of accumulating credit card debt. If you can wait to buy bigger items like washing machines or televisions until the holidays, it’s a great time to more easily avoid going into debt.
Use Cash or Debit Cards vs. Credit Cards
If you’re trying to save money, using cash is a good way to limit your spending. You can only spend what you have, so you’re less likely to make impulse purchases. Debit cards work similarly to cash, but they can be helpful if you’re concerned about the risk of losing cash.
With that said, some credit cards offer incredible rewards that can save you money over the course of the year on things like airline tickets and hotel rooms. The main objective is to maximize your savings, so take the time to weigh your options based on your long-term financial future.
Keep Track of Your Spending
One way to avoid holiday debt is to be mindful of your spending. Make a list of the people you need to buy gifts for and set a budget for each person. The most important part of creating a budget is to keep track of spending to stay on course.
However, if you’re working on a cash-only plan this holiday season, it can be tough keeping it all organized. To make things easier, try using a system of cash envelopes for specific stores or people you’re buying for. That way, you’re sure the budget is being maintained without having to add up a pile of receipts at the end of the day.
Ways to Reduce Overgrown Debts
Fortunately, if you are already in deep credit card debt, there are a number of options available for getting out of it. Here are some ways to reduce overgrown debts, which make it possible to save thousands over time as a result of lower interest charges and better repayment terms.
Credit Card Balance Transfers
One of the leading strategies to reduce credit card debt is taking advantage of balance transfer offers. Sometimes you can find deals that give you 0% interest for six months or more, which can save hundreds in monthly interest charges. Those savings can then be used to pay down your principal balance to get out of debt faster.
A serious drawback to this option is that the best deals require exceptional credit ratings, which is often tough for those already deep in debt. That said, it’s always worth checking if one of your current cards is offering these deals. If so, you could simply move around your card balances to maximize your interest savings.
Debt Relief Programs
If your financial situation is becoming too much to deal with and payments are too large, bankruptcy isn’t necessarily your only option. You can work with a debt relief company like Alleviate Financial instead, which will negotiate with your creditors to create a payment plan that works for you.
A major benefit to using this method is that it won’t have nearly the negative effect on your credit score that bankruptcy would. That way, you’ll be able to turn your financial situation around much faster.
You can also try to consolidate your debt into a single loan with a lower interest rate, known as a debt consolidation loan. The major drawback to this course of action is that you’ll need to have a high enough credit score to land an interest rate that saves you money.
Keep in mind, finding a consolidation loan that offers simple interest instead of revolving interest charges will also save you big money. That’s because you won’t be paying interest on the interest charges from prior months like you do with credit cards.
Do You Need Relief From Credit Card Debt?
By following these tips, you can avoid debt on Black Friday and Cyber Monday – and have a stress-free Christmas season. For those who are starting to think about how they’ll reduce their credit card debt so they can afford to take advantage of the big sales, contact the debt experts at Alleviate Financial today.