You Do Not Have to Go Into Debt this Holiday Season
By Glen McKenzie
For many North Texans and people all across the nation, the holiday season brings days filled with good food, family gatherings, twinkling lights, joyous greetings, and, unfortunately, holiday debt.
Memories of the holiday season also evoke the craze of Black Friday. We are all searching for that terrific “deal.” According to cnbc.com, spending during the 2017 holiday season resulted in the average consumer amassing $1,054 of holiday credit card debt. More staggering is the fact that Americans ended 2017 with $91.6 million of new credit card debt, according to marketwatch.com.
I do not believe that most people intentionally go into debt for the holidays. Therefore, I wanted to share a few steps that you can take to minimize any potential holiday debt in your household.
Plan Ahead by Creating a Budget:
While it is a little late to implement this year, I recommend creating a budget a year in advance. Start with a list of everyone you intend to purchase gifts for with a specific budget for each. Do not forget to include decorations and all holiday related items that you might purchase for the season. The $1,054 average debt from 2017 would be about $88 a month, if spread out across 12 months. Try saving that each month for the following year’s holiday shopping. It simply takes a little financial discipline. Just think of how proud you will be in having created a budget, implemented it, and ended the season with no holiday debt hanging over your head.
Track How Much You Spend:
Since the holidays are right around the corner, you still have time to commit to a plan. Make sure that you write down your plan and track each holiday purchase you make. Include the actual amount you paid for each gift compared to what you budgeted. Remember, as it gets closer to Christmas, prices frequently drop. If a price goes lower than what you paid, you may be able to get the difference with your price protection feature on your credit card. To help you stay on track, you may even consider setting up a notification with your financial institution to alert you anytime you spend over a certain amount. This will help you maintain focus and help identify fraudulent transactions. Sadly, we often see fraud more during the holidays.
Be Rewarded for Your Purchases:
A tip to get the most bang for your buck would be to put your purchases on a rewards credit card and pay it off when your bill arrives. If you are going to use plastic this season, think about using a rewards card (with cash back or gift cards) for making the purchase. You can further reduce the expenses that come out of your pocket if you save and accumulate credit card rewards and redeem them during the holidays.
Someone told me many years ago that it is not the price of the gift that counts, but the thought. People appreciate spending time with those they love, creating memories, or even something homemade that reflects care. Home photo albums, scrapbooks, or doing little things that make someone’s life easier might be a perfect gift this season.
DATCU is here to help. Call us at 940-387-8585, go to our website at datcu.org, or stop by any of our twelve (12) convenient branch locations to learn how you can use this opportunity to put yourself on the path to financial wellness. Merry Christmas and best wishes for a wonderful New Year.
If we can ever assist you in any way, it would be our pleasure to serve you. Glen McKenzie, President/CEO of DATCU Credit Union.