The holidays are a time of joy and celebration, but they can also be a source of financial stress. Many Americans struggle with credit card debt, and the temptation to overspend during the holiday season can make matters worse. However, there are steps you can take to keep your spending under control and avoid adding to your debt.
One strategy is to maintain detailed records of your holiday spending. Mike Chadwick, a certified financial planner and president of Fiscal Wisdom Wealth Management, recommends “keeping score” of all your purchases and expenses. People have credit card debt because they spend more than they take in,” he says.
“If you keep granular records, it’ll never happen.”
Another approach is to reflect on your purchases and their impact on your finances. Jay Sharifi, founder of Legacy Wealth Management, suggests journaling about your spending. Your credit cards don’t run themselves up.
Hold yourself accountable,” he advises.
Avoid holiday credit card overspending
Setting honest expectations with loved ones is also crucial.
“Have difficult and honest conversations with those closest to you that you will not be spending because you are trying to get the family to a healthier place,” Sharifi says. Consider setting budgetary limits, giving handmade gifts, or passing down items instead of buying new ones. If you do use credit cards, it’s important to pay off your balances before adding more.
Using credit responsibly can earn you rewards like cash back or airline miles, but adding to your balance when you’re already struggling to pay it off is detrimental. Chadwick advises only spending what you can pay off in full when the bill arrives. “No card purchases unless you can pay for them in full when the bill comes in,” he stresses.
Managing credit card debt requires diligent planning and honest communication. If you’re already deep in debt, consulting a financial planner or credit counselor can help you set a budget and explore strategies to improve your financial health. By taking steps to keep your spending under control, you can enjoy the holidays without adding to your financial burden.
