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The holidays are a special time of year – and potentially expensive. Whether it’s traveling, visiting loved ones, or organizing meals, you can easily spend a small fortune just on plane tickets and food. And let’s not forget the tradition of giving freebies – something that could easily drain your bank account if you’re not careful.
In fact, when it comes to getting through the holiday season without any negative financial impact, it really is essential to be careful. But avoiding debt is not easy. In a recent TD Bank survey, 69% of respondents say they have spent too much money on vacation in the past. If you want to avoid doing that this year, follow these essential steps.
1. Put yourself on a budget
Some people spend money on vacation and hope their paychecks and savings can cover their purchases. A safer bet, however, is to take the opposite approach: first figure out what you can afford to spend, and then make sure your purchases don’t exceed the number you land on.
You may have different sources of money available to spend during the holidays, including money left over from your regular paycheck or a bonus that you plan to collect in early December. Count these numbers to find out what you are dealing with.
2. Set priorities for your spending
If you go over your budget for gifts and decorations, by the time you are ready to book your flight to see your family, you may run out of funds. If you insist on taking this trip, you may have no choice but to charge this flight to a credit card hoping you can pay it back within a reasonable time.
Rather than putting yourself in this situation, set priorities so you know how to allocate the money within your budget. If seeing your family is the most important thing for you, your flight home is the thing you should spend money on first. Then you can go through your list, so if you run out of funds on the fifth or sixth position, dropping it might not be that big of a deal.
3. Make impulse buying harder to make
A big reason many consumers overspend while on vacation is because they fall victim to impulse buying while shopping. It’s easy to be drawn to sales signs during the holidays, especially when you don’t have a buying plan in place. But there are steps you can take to make impulse buying more difficult.
First off, if you’ve ever been a victim of impulse buying, buy with cash. You’ll lose out on some of the perks that credit cards offer, like cash back on gifts you buy, but you might prevent yourself from overspending if you only bring enough cash to the store to purchase specific items on. your list.
Next, limit the time you spend shopping online. The less time you spend browsing, the less likely you are to stumble upon something that suddenly catches your eye.
Spending too much on vacation is an easy trap to fall into, but dangerous nonetheless, as it could lead to a heap of debt. Follow these tips to avoid this fate and avoid the stress of starting the New Year with a credit card balance hanging over your head.
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