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How to have a debt-free holiday season

Did last year's holiday shopping season leave you with a large credit card bill? If so, make a plan, create a holiday budget, and stick to it to avoid going into debt to fund your holiday expenses.
Here are four helpful tips to help you take action now to avoid the same thing happening this year.

1. Make a Gift List and Gift Budget

Make a list of everyone to buy holiday gifts for, including newspaper delivery people, crossing guards, and your kids’ sports coaches and teachers. Beside each name on your list, note the budget for their present. Don’t spend more than you’ve budgeted for, or you could find it hard to fully pay off your holiday bills when January rolls around.
Also, don’t forget to include wrapping paper, gift bags, tape and labels as well as Christmas cards and postage if you plan to send paper cards.
BONUS: Making a list of gifts forces you to plan your holiday purchases, which can help you to avoid a last minute shopping frenzy.

2. Make a Holiday Entertaining List and Budget

If you enjoy entertaining during the holiday season, it’s important to plan a holiday entertaining budget. This should include a list of costs associated with any seasonal decorations you plan to buy this year, such as a Christmas tree, lights, garlands, and wreaths. Additionally, list the costs of meals, wine, and taxi fares or travel costs for you and/or your guests.
BONUS: Making a list of entertainment expenses can help you to more easily identify ways to save. Consider making your own holiday decorations, redeeming loyalty points and/or credit card rewards, or choosing less expensive holiday entertaining options like hosting a potluck.

3. Make a Master Budget by Adding Your Gift and Entertainment Costs

Once you’ve budgeted for holiday presents and entertaining, total your projected costs. Take into account the fact that your projected costs are estimates, and the actual prices might be slightly more or less.

Next, calculate out how many weeks until the holidays start and divide your total budget by the number of weeks. This tells you how much you’ll need to save each week between now and then to cover your holiday costs without going into debt.

For example, if your projected holiday expenses are $1200 and there’s 6 weeks until Christmas and your first holiday event, you’ll need to start saving $200 per week starting now. 

4. Set Up Regular Holiday Savings

Each week, set aside your holiday budget amount in a savings account.
While using your credit card for holiday spending is convenient, and may help you earn additional points and rewards, it’s important to avoid racking up holiday credit card debt that you can’t afford to pay off in full when you get your next bill. Setting up a regular weekly savings contribution to a High Interest Savings Account will help to ensure that you’ll have money available to pay off your bill in full when it arrives, and you won’t have to cover costly interest charges.
When it comes to enjoying a debt-free holiday season, the sooner you start planning and saving, the more likely you are to be successful.
For more budgeting and savings tips, contact a Meridian branch to book an appointment with an Advisor today.