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(HealthNewsDigest.com) – As the holiday quickly approaches, we all know we will be faced with groaning tables of goodies that tempt us to throw dietary caution to the winds. Just as we are lured by holiday cookies and hams, our wallets face daunting challenges when we face mountains of tempting sales fliers and endless TV commercials that entice us to spend. Fortunately, by being an informed consumer, you can avoid overindulging in debt during the holidays – even if you have waited until the last few days to prepare.
For many shoppers, the biggest temptation was “Black Friday,” the day following Thanksgiving — the day when shoppers traditionally launch the holiday shopping season and spend enough to put retailers in the black for the year. For others, the debt danger rises as the holiday draws near and the shopping is not yet done.
If you are a shopper used to putting holiday expenses on credit cards, this year, more than ever, may be the time to think twice before pulling out the plastic. Here are some pointers to boost your willpower to stay within healthy debt limits:
Make a plan. It’s not too late! If you are days away from a holiday with nothing planned, human nature says that you will be more likely to hit the mall and load up on somewhat random gifts. By not planning, you also make it more likely you will spend too much. Instead, calculate how much you can and want to spend for holiday festivities. Then compare that total to a list of everything you anticipate spending on this holiday season. Include everyone you’ll give a gift to and how much you plan to spend, along with cards and postage, year-end tips for newspaper carriers, babysitters, housecleaners, doormen, hairdressers and other service providers, and gifts for teachers, doctors, neighbors or others close to your family. THEN get shopping.
Watch for higher interest rates. In anticipation of new restrictions imposed by the Credit CARD Act, which will take effect in February, many credit card issuers have raised their rates substantially the last few months. If you have not reviewed your card disclosures carefully, be sure you know what you are getting into with credit card debt.
Be realistic. While the economy’s outlook is more positive, many Americans are still feeling the impact of a sluggish economy. If you are unemployed or underemployed, do not run up debt in hopes you will have funds to pay it off after the New Year.
Budget. Lay out all your anticipated holiday spending and be sure you have funds to pay for it. It is unhealthy debt if it will take more than one month after the holidays to pay it off — ideally, you will be able to pay bills off immediately. If you do not have enough money for your plans, cut back. Your loved ones will understand, particularly in the current economy.
Spend with cash. Research shows people buy more when they use credit. By spending cash only, you can be certain you do not overextend your budget.
Do not buy for yourself. Treat yourself to gifts that cost little or nothing. That may mean a hot bath when you get home from shopping or a cup of coffee during a shopping break, rather than a new cashmere sweater or a deeply discounted video game system.
Resist in-store promotional cards with low introductory rates. Odds are good that those introductory rates will increase before your ability to repay the bill increases. It is tempting to add a credit card to score a discount, especially as the days til the holiday dwindle, but do not do so unless you can afford the potential hit to your credit score from opening a new account, the discount will be substantial (e.g., you are doing all your shopping in one store), and you can repay the entire balance immediately.
It is possible to avoid debt and holiday overindulgence by planning ahead — and using a few tricks to eke out extra holiday buying power. Now, if only it were so simple to resist your family’s famous fudge ….
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