You Can Avoid Holiday Debt NOW! Read These Expert Tips to Learn How

The holidays are still a few months away but many parents are already starting to think about how to give their children great Christmas or Hanukkah gifts this holiday season without breaking the bank.  By planning ahead for holiday spending you can give your kids great holiday gifts without blowing the family budget. Matt Reiner (CFA, CFP), CEO and co-founder of Wela shares his advice for avoiding holiday debt and starting to save money now for holiday gifts.

holiday debt
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  • Start buying before Black Friday: It’s easier said than done, but don’t wait until the last minute to do your holiday shopping. Start getting those gifts while they aren’t heavily sought after.  Is your child already asking for a big ticket item or a hard to find toy? Get ahead of the curve and buy it now. Also, by spreading out your purchases, you can utilize cash flow over multiple months, as opposed to building up credit card debt during the holiday season months.
  • Plan and budget in advance, as holiday spending is always more than just gifts: Families need to plan for the holidays well in advance because the costs associated with the holidays go beyond the cost of buying gifts for your kids. Travel, food, parties and other engagements tend to push the expenses for the holidays even higher. Once it comes time to start purchasing the gifts, the money goes on the credit card, and the other expenses of holiday season start piling on. Before you know it, you are wondering why you don’t have enough cash to pay off your current credit card bill. 

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  • Treat planning for the holidays like building your emergency fund: Planning for the holidays is just like planning for an emergency reserve – you need to build it up for when expenses happen that are unforeseen. The holiday season tends to have a lot of those types of expenses.  Start planning and setting aside money now for holiday expenses, from gifts to holiday travel to a Christmas tree and more.
  • Avoid credit card savings traps: Don’t fall into the trap of saving a little on your purchases by opening up a new credit card. That's a great way to accumulate holiday debt. Instead, look to use the points you already built up on your current credit card to use toward holiday gifts or getting some money back that can be put toward holiday shopping. Having too many credit cards, and signing up for them during the holiday season, leads to forgetting about them and allowing interest to accrue, and accrued interest is the type of gift you do NOT want during the holiday season. 

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With a little planning – and budgeting – for the holidays you can make the holidays magical without going into holiday debt.

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You Can Avoid Holiday Debt NOW! Read These Expert Tips to Learn How

Jamie is a Beltway Insider who loves channeling her pre-motherhood love of traveling into spending time exploring all D.C. has to offer with her brood of two girls and two boys ages 9, 7,5, and a baby. She is a reformed lawyer turned full-time kid wrangler who enjoys photographing her everyday chaos and anything salted caramel. Since life is never dull, she loves writing about the issues and events going on in her life at any given time, including caring for a daughter with special needs and th ... More

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