Saying NO to Holiday Debt

The season of giving has come once again, and with it comes the potential for devastating overspending. When consumers do not plan ahead for holiday shopping, they may find themselves quickly accumulating debt in a very short time.

 "The overspending that quickly leads to debt generally occurs with unplanned holiday preparations and gift giving," says David Jones, president, Association of Independent Consumer Credit Counseling Agencies (AICCCA). "By spending within your limit and sticking to a spending plan, consumers can come through the holidays unscathed."

 For those who wish to plan ahead and avoid debt this holiday season, AICCCA offers these three steps:

1. Commit to spending only what you have saved - The best way to avoid credit card debt is to simply avoid using credit during the holidays. An excellent way to do this is to make sure that you spend no more than the amount that you have on hand at any given time. In other words, if your bank account can not cover the cost of the item, it would be a good idea to either wait until you can cover it or to simply skip buying this item altogether. While using a credit card may initially seem like a quick and easy method for gift buying, you may end up paying twice the cost of your purchase when your debt is finally paid off.
   
   
2. Shop with a list in hand - Make a list of this year's gift recipients and plan on how much you will spend on each gift. This way, you can make sure that you keep track of the prices for each gift that you buy, and adjust accordingly if needed. For example, if you budget $20 per gift but you spend $25 on one person, you may need to even out the costs by spending $15 on someone else. The trick is to always carry your list of gifts and expenditures with you, so that you are not caught unprepared if you happen to come upon a gift that would be perfect for a certain person.
   
   
3. It's never too early to save - Always remember that even though you may not have sufficient time to put aside much money for this year's holiday expenses, now is the time to start thinking about next year. Start putting money in a holiday account so that during the next holiday season, you will be prepared to spend your desired amount. For example, a good goal would be to save approximately one and a half times more than you spent during last year's holidays so that you are fully prepared this time around.

While the spirit of giving may be strong during the holiday season, holiday debt can last all year round. In many cases, simply leaving credit cards at home will help consumers stick to their holiday budgets. By sticking to shopping lists, spending within their means, and saving for the next holiday, consumers can avoid holiday debt altogether.

Founded in 1993, Association of Independent Consumer Credit Counseling Agencies (AICCCA) is a national membership organization, established to promote quality and consistent delivery of credit counseling services. AICCCA and its members are focused on improved creditor relations, efficient processes and advanced technology to best serve clients and creditors. AICCCA members are independent nonprofit agencies that advocate for debtors, counsel millions of consumers annually nationwide and provide debt management services to consumers with excessive unsecured debt. For more information or to contact an AICCCA member office call (800) 450-1794 or visit www.aiccca.org.

Handling Your Holiday Debt

Not all of us are rich, and it a real possibility that even with all the spending restrains, you might take up some holiday debt. Small amount of holiday debt is not an issue if you have plan to handle it with diligently. You should plan before holiday season on how you will pay off any extra debt that you might take. And this plan should not be multiyear plan. Remember, next holiday season will be here before you know it. So make sure you pay off all your old holiday debt by June or July. If you don't think you can't do it, you should not take up any holiday debt. Control your emotions and temptations and you'll be happy when you retire rich!

Article Courtesy of Consumer Credit Counseling Agencies (AICCCA)