4 Ways to Avoid a Debt Hangover This Holiday Season

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Suggestions from The Debt Myth Help Consumers Avoid Post-Holiday Debt

According to the Federal Reserve Bank of New York, balances on credit card accounts increased by approximately 5 billion dollars during the 4th quarter of last year. That's a hefty increase during the holiday season -- no doubt leaving consumers with a debt hangover they'd prefer to avoid. How can consumers avoid post holiday debt this season?

Debt-elimination expert Jackie Beck of The Debt Myth offers these suggestions:

1. Recognize that it's not too late to cut back on spending for this holiday season -- even if several purchases have already been made. Cuts can still be made to the total number of people bought for and the total amount spent per person. For example, while it's great to give gifts to coworkers and other acquaintances, it's not necessary, and many times they'll be grateful not to feel the need to reciprocate. Don't break the bank to buy gifts that acquaintances probably don't even want.

2. Manage expectations. Not surprisingly, holiday debt often comes about because of a sense of obligation or tradition. The commercialization of the season has only made that worse. But it doesn't have to be that way. Letting others know ahead of time that this year, gift-giving will be a low key affair can help to manage expectations. Not comfortable speaking up this close to the holidays? Quietly reduce the number and costs of gifts anyway, and set the stage for next year by speaking out in late January when others may be more receptive to the idea as they deal with the aftermath of the holidays themselves.

3. Spend with a plan. More than anything else, avoiding holiday debt is a matter of planning and budgeting. Decide how much total money is available for the season without resorting to using credit, and then devise a plan up front for how that money will be spent. Start with the total budget and allocate a portion of it to each intended recipient. Remember that spending doesn't have to be excessive or equal for each recipient in order for a gift to be meaningful. Instead, a meaningful gift takes the recipient's wants and needs into account while remaining in or under budget. This means gifts can even be free or handmade if appropriate. Gifts of time or service are often excellent ideas.

4. Shop strategically. Once armed with a plan, carry it out by shopping strategically. That means looking for the best price on each item, using coupon codes, taking advantage of rebates by returning the necessary forms, and getting free shipping where possible. (Free shipping day is December 18th this year, and Amazon Prime members always have free shipping.) It also means ONLY buying the intended items. Over-shopping (continuing to buy "just one more thing" even after all intended purchases have been made) and impulse buys are big culprits when it comes to increasing holiday debt. Spending additional money on "bargains" is actually just increased spending. Stick to the budget instead.

About Jackie Beck
Debt-elimination expert Jackie Beck is the author of The Debt Myth and creator of Pay Off Debt (http://www.thedebtmyth.com/pay-off-debt-app/) -- an app that's helped tens of thousands of people use a debt snowball to pay off debt.

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Jackie Beck
The Debt Myth
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