Christmas is a time of sharing and giving, but the bills and debts after celebration can give you headache. It is easy to get tempted by all the offers and sales and you are likely to end up overspending. Therefore, it is important that you decide how much you can afford before you plan your Christmas spending. Proper planning and budgeting will help you to avoid overspending and building up debts. Check the various tips that will help you to avoid the various Christmas debts.
Work Out On A Budget And Stay Stick To It
Overspending is easy during Christmas. Everyone wants to gift their loved ones the best gifts they can and are likely to get tempted by the offers and advertisements. So, ahead of Christmas it is important that you try to be realistic and work out on what you can afford. Take out some time, sit down and draw up a budget based on what your monthly income is. Having a budget will help you know exactly where all your income is going. Various online tools can be found that will make it easy for you to create a budget and understand your financial situation. Keep a regular check on all the transactions that you make using your bank and credit card. After that you can categories all your transactions and it will be absolutely easy for you to know what and where you are spending. If the money going out is more than what is coming in, you can make the required changes in your budget accordingly. Once you have started having spare cash you can pay it towards your debt.
Keep Your Other Bills On Your List
It may be the holiday season, but you should not forget your other bills such as rent, mortgage, tax and other utility bills. Missing such payments can have serious consequences on your financial situation and get into serious debts. So, make sure during the holiday season you set your priorities right. Besides if you have a lot of debt on your credit card after Christmas, at least try paying the minimum amount every month. However, making minimum payment can take you a long time to pay off your debt completely. So, try making extra payments more than the minimum amount and it will significantly reduce the time taken to pay off the debt.
Avoid Borrowing And Do Not Bank On An Overdraft
Avoid borrowing if you are unable to pay for the holiday purchases outright. You should stay away from applying for cash assistance unless they are really cheap and you know you can afford the repayment amount. It is important that you understand the interest and other charges of unauthorised overdrafts can be very expensive. If you still consider borrowing then you should first speak to your bank or lender. Short term loans such as pay day loans charges high interest rates and thus can cost you more than you consider. So, even if you apply for such short term loan do not forget to check the full payback amount that you will need to make by the end of the term and be responsible with the payment. You can also search for the best credit cards deals and keep your eye on interest-free offers.
Shop Around And Compare The Prices
Do not just stick to one particular shop. Instead, try as many different stores as you can. Comparing the rates will help you find cheaper deals. Also ensure you avoid buying from unauthorised traders.
It is likely that you may get carried away during the holidays. If you have borrowed money for gift buying and celebration, you should start paying it back right after the holiday is over. If for any reason you miss your payments, or repay back late, the costs will add up and get you into debts. Therefore, it is very important that you budget carefully before borrowing and make repayment on time. Once Christmas is over you can start saving an amount ever month for the next year so that you do not have to deal with Christmas debt all over again.