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10 Steps to Avoid Holiday Debt
The holiday season is just around the corner and you should be creating a holiday spending plan now.


This is often the time when the budget that has been working fine for people all year gets completely blown, resulting in a pile of debt for the new year. According to the National Retail Federation, people will spend $474.5 billion this holiday season, an increase of 4% over last year.


Here are 10 basic steps you can take to help avoid holiday debt:1. Make a master list: When it comes to holiday shopping, most people make a list of the people that they need to buy gifts for and leave it at that. They conveniently forget to budget for all the other expenses that come with the holidays. Some other basic areas of your holiday budget that you need to consider are, home decorations (both inside and out), party costs (both as the host and as a guest), travel, greeting cards, postage costs, gift wrap and other supplies. There can be many others depending on how extravagant you get with your holiday planning.


2. Estimate the costs: Once you have your holiday list, look at each item and make a quick estimate of the cost. Be sure to include estimates on the prices for each of the gifts you are planning to give. Add everything up and you will have an estimate of what the holidays are going to cost.


3. Set a budget: Chances are that your initial estimate of your holiday costs may not fit your current budget. If you find that your initial estimate is more than you can afford to spend, go through the list again, making adjustments where you can. Doing this a second time should help you be more critical on what you are willing to spend on each item and help bring down your overall expenses. You may also find that some of the expenses that you had originally placed on the list are things that you can do without.


4. Begin looking now: Once you have the list and a budget, begin looking for the things you need right away. The sooner you can find everything, the less stress you will have as the holidays come closer. You will also be much less likely to overspend if you're not in a rush to purchase things at the last minute.


5. Research prices: Once you know the gifts you plan to purchase, spend a little time researching the price. Most people are so relieved at having found a gift, they buy it without a second thought. Doing so will rarely be a bargain. Check online to see if the gift can be found for less (don't forget to add shipping costs) and check other stores in the area. The closer you get to the holiday, the less opportunity you will have to search for the best price -- which means paying more.


6. Consider alternative gifts: When choosing a gift, take the time to think about that person and what he or she would truly enjoy, rather than opt for a generic store-bought gift. While this will take a bit more work, the gift will be much more appreciated and will often cost a lot less. Searching online auctions, flea markets and estate sales for a gift rather than at the shopping mall can turn up that perfect item for a fraction of the price.


7. Use your talents: Consider using your talents to create the gifts you need. These gifts will often be more meaningful and cost much less than a store-bought gift. If you have a talent for photography, incorporate that into your gift giving. If you are a good cook, consider making a food basket of your favorite creations. Using your talent can save you money and let the recipient know that you have put time, thought and effort into the gift. Even if you don't have a specific talent, you can give the gift of your time, which is a gift that most people will appreciate much more than any little trinket you might buy.


8. Gifts that make a difference: There are always some people that already have everything that they need. Instead of wasting money on something simply because you need to get a gift, consider a donation to their favorite charity or a cause you know they support. An excellent gift in place of a generic gift card is a gift certificate to Not only will the recipient get a chance to choose someone to lend money to, when the loan is paid back they can choose to take the money and use it for themselves or give out a new loan to someone else.


9. Avoid the credit card: Unless you have the money in the bank to pay off your credit card in full, avoid using your credit card to make holiday purchases. Making purchases on your credit card is easy, but that convenience can cost you. It will increase the likelihood that you will bust your budget, especially if you need to get a lot of last-minute items. It's important to remember that when you use a credit card to pay for a gift you can't pay off immediately, the cost of the item is actually much more than the price you pay at the register -- due to the interest you will be paying on it long after it has already been given.


10. Get a job: If after making your budget and being creative to save money on gifts, you still aren't able to get your holiday budget to balance, consider taking on some part-time holiday work. Last year there were an additional 596,000 jobs created and filled during the holiday season, according to the National Retail Federation, making it one of the easiest times to pick up some extra work. While it will require time and effort on your part, it will be a lot less stressful than not having enough money in your bank account when the holidays are over and work opportunities are much harder to find.


By taking a bit of time to prepare what you will be spending this holiday season, you can take the necessary steps to ensure that when 2008 arrives, it won't arrive with a new pile of debt.

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