Best Ways to Spend This Holiday Season

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It’s the holiday season, and while you are out gift shopping, you may be wondering, “How am I going to pay for this?”

Even if you have the funds, you may not be sure if you should pay cash or put it on a credit card. Cash is the safest way to shop if you are looking to keep bills down and stick to a budget. However, in some circumstances credit may be the smartest medium for your purchase.

Regardless of how you pay for your gifts, make it your personal goal to avoid accruing debt this holiday season! It’s common for many to spend more than they can afford during the holiday season. However, this can be a major financial mistake. Save the credit cards for large purchases and consider putting them on a low interest card. Check out your perks for different cards. Ask what the rewards system is like. Will you receive cash back or purchase protection? Does the card offer an extended warranty or insurance on the product? You can then make a decision if it is worth it to put the purchase on the card. If you do opt to charge purchases, make sure you can pay off in a short period of time. Otherwise you’ll end up paying much more for that product over time in accrued interest.

At the end of the day, cash is still often the best to use when shopping for gifts. The best way to prevent overspending is to bring your ideal limit with you in cash and leave the cards behind! Make a budget with the maximum amount of money you can afford to spend on gifts this year. Before you even leave the house, make a list of who to buy for, what to buy, and the costs. Mapping out what you plan to purchase will prevent you from going over your total allotted budget. Consider bringing a little bit over ($50 max.) the amount you estimated (but under your total gift buying budget). This will ensure you have enough money for tax and any minimal, but unexpected, purchases (batteries for a toy, etc.).

If you see something at the store that is out of your budget for the trip, don’t buy it! You can always come back or find it someplace else, perhaps at a better price! Consider writing it down or taking a picture of it with your phone. This way, you can decide later if it is really something you need or want. Make sure your total gift budget has a little extra contingency money in it; leaving a little cushion will help you fund any unexpected (or forgotten) gifts you may have to buy!

If you enjoy the perks of credit cards, but aren’t sure if you can control your spending, try a store debit card instead. Target and Nordstrom are examples of stores that offer debit cards as an alternative to their high interest store credit cards. These store debit cards work the same way as a bank debit card would. They offer the same rewards as the retail store credit card, but without the worry of bills or interest.

Also, make sure you check your debit cards’ policies and see if your bank offers any cash back rewards for using your debit card at certain stores/products.

Remember, the holiday season is a great time to gift your loved ones but you don’t need to go into debt doing so. The holiday season may put a weight on your wallet, but if you rack up the credit card bills during the holiday season, you will find no relief in the New Year trying to pay off your debt!

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