There’s a lot to spend money on during the holiday season. From gifts to holiday meals to travel, it’ll seem like there’s no end to the spending. Unfortunately, when the holidays are in the past, your credit card statement will show you the true damage of your spending.
If you want to avoid the shock of a large credit card bill this upcoming January, it’s important to implement a plan to manage your spending during the holidays. It’s the steps you take today that will save you from financial stress in the future.
So, this leads to the million-dollar question: what’s the best way to manage credit card spending during the holidays?
There’s no perfect answer, but there are some basic steps you can take to put yourself on the right track.
1. Track every dollar you spend
The biggest problem with a credit card is you can spend up to your limit without ever realizing that you’re doing so. And when that happens, you could be running up debt that you can’t afford to pay.
Track every dollar that you spend so that your balance doesn’t spiral out of control. For example, review your credit card balance once per day to ensure that you’re not spending money you can’t afford to pay back.
2. Set a budget
There’s a good chance you have an understanding of how much you generally spend during the holidays. You can even review your spending from last year (or the last couple of years) for a more concrete idea.
With this number in mind, set a budget that you’re comfortable with. It may not be as much money as you would like, but at least you’re taking a step toward preventing overspending.
3. Put your credit card away
Let’s face it: saying that you won’t overspend and taking action are two different things. If you don’t like your odds of spending responsibly during the holidays, put your credit card away and rely on a cash system. It may be an inconvenience for a few weeks or a couple of months, but it’s better than dealing with the aftermath in the new year.
These three steps should help you better manage credit card spending during the holidays. The most important thing you can do is keep a watchful eye on how often you use your card, what you’re buying, and how fast your balance is growing.
When you properly manage your credit card debt during the holiday season, you’ll feel better about your financial situation when the new year kicks off.
Would you add any other steps to the three above? What strategy do you use to prevent overspending during the holidays?