Debt the Halls: How to slim your spending without being a Scrooge

Debt the Halls: How to slim your spending without being a Scrooge

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SALT LAKE CITY — I will admit I hit the stores on Black Friday. I wanted those deals. But I did not shop with reckless abandon — I had a list and checked it twice. I knew where to go, who I was shopping for, and how much I could spend. Traffic and lines aside, I would say it was a rather successful day.

Shoppers plan to spend an average of $854 for gifts this holiday season, up from $646 last year.

–American Research Group, Inc.

But as I stood in line, watching cashiers swipe plastic, I could not help but think about recent statistics I read. According to a new study by American Research Group, Inc., shoppers say they plan to spend an average of $854 for gifts this holiday season, up from $646 last year. That is a nice chunk of change, or potential debt.

Too many families are already in the debt trap. reports that the average credit card debt per household is $15,799 and the average annual percentage rate (APR) on a credit card with a balance is 12.78 percent. If this is the case, then a lot of families need to avoid the holiday debt hangover.

To deck the halls minus the debt, here are some tips to slim your spending without being a scrooge.

Holiday Budget

Start by figuring out how many gifts you need to buy for family, friends, colleagues, and so on. Then decide out how much you can afford to spend. Preferably, you will be paying with cash or debit card. However, if you have chosen to use a credit card, decide in advance how much you are willing to charge and how you are going to bring your balance back to zero. Then take the amount you can spend, divided by the number of gifts, and the result is your budget per person.

For example, if you can spend $850 for 15 presents, your budget per person is about $50. Granted, you will spend more on some and less on others, but generally speaking, your target is set.

Check it Twice

(AP Photo/Argus Leader, Jay Pickthorn)
(AP Photo/Argus Leader, Jay Pickthorn)

So who made the nice list this year? Write down the names of everyone you are gifting. Then decide how much you will spend on each. Immediate family members will probably take precedence, followed by extended family, friends, and colleagues. Did you miss anyone? Make sure everyone is tallied in, and do not forget the extras—decorations, cards, and wrapping materials. If you are worried you might miss someone, you might want to grab a couple of preloaded gift cards to have on hand. (You can always use these later for your own needs if you end up not needing to give them away.)

Old St. Cash

The best way to play Santa is with cold hard cash. Do you research first—know where you are going, what you intend to purchase, and how much it will cost. Only withdraw the amount you need for the gifts you intend to buy. Using your debt card is also a good option, but be extra vigilant. It is much easier to swipe and punch in a code than pay with cash when you are down to your last dollars.

Credit that Jingles

Rewards points on credit cards can be merry and bright, and some offer double or triple points on qualifying purchases during the holidays. If you are in good standing with your rewards credit card, and are confident you will pay off the balance in full by the next billing cycle, then by all means—get those points. Find out how long the point will last; hopefully you have a card that allows you to spend points throughout the year, or save them up for holiday purchases next year.

If you cannot pay the balance in full by the next billing cycle, be sure to use a low interest credit card and have a plan in place to pay it off quickly. Do not incur a balance of more than 20-30 percent of your total card limit. Crossing this line might hurt your credit score.

Let it Save

Some lenders offer Christmas Club Term Deposit accounts so you have cash on hand when you need it most. They offer a higher interest return than regular savings accounts, and most only require $25 to get started. The funds are accessible should you need them before it ‘tis the season. This is a great way to tackle your holiday shopping, and now is a good time to start for next year.

These tips will keep your Christmas cheer (and debt) in check and help you avoid a holiday hangover in 2013. For further advice on festive spending and staying scrooge free, contact your financial advisor.

Sharon Cook is the senior vice president of Marketing and Public Relations for Mountain America Credit Union

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