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Our desire to make everyone happy during the holiday season can cause great harm to our budget if we are not careful. One of the tendencies in recent days is to spend an enormous amount of money, placing most of that expenditure on top of our current credit card debt, with the intention of paying it off quickly after the new year. However, more often than not, the debt is not paid off for months afterwards. This means we pay a large amount of interest in the long run. The keys to overcoming post-holiday debt is to spend wisely, follow a budget, and maybe use some unexpected strategies while buying gifts for loved ones.

In order to spend wisely, one must have a plan. My greatest recommendation is to shop the sales. Every little bit saved adds up. Secondly, shop on-line. Even if you are want to go to the store to make your purchase, you can use on-line shopping to create a list of the items you are going to buy and avoid spur of the moment decisions about gift items. It is a proven fact that planned spending is better for the budget...which leads us to our next point.
Create a budget and stick to it. I know, it is hard to do, but will pay great dividends in the long run. If you have a large number of gifts to buy, a budget is an even more important tool to help you avoid overspending. Again, just taking the time to determine a spending budget will give you a better chance at not entering the store and making unwise decisions in your spending.
I recently heard a surprising suggestion about spending during the holidays. The recommendation is, spend money from your savings. Are you surprised? Well, the theory is this...your savings are probably earning you about 3-4% in interest. Spending cash withdrawn from your savings will save you 15-20% interest that you would pay for the charge on a credit card. If you do the math, you come out way ahead by spending cash from your savings. Obviously, you must make a commitment to replenish the savings. If you just like to pay the enormous interest to the credit card company, pay yourself back with 20% interest. That will increase your savings...which is always a good thing.
In the end, if you plan to use credit to purchase gifts for the holidays, please use some common sense. It is a better idea to place those charges onto one card than spread them over many cards. It is also a good idea to pay off that debt in January, rather than waiting until June. You can even use the "spend from your savings" strategy outlined above if you want.
With a little planning and some discipline, the post-holiday debt can be handled. As with everything, however, common sense and wisdom are key.

Learn more about this author, James St. John.
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