10 Holiday Shopping Debt Traps You Need to Avoid

1. Create a Holiday Budget: Develop a plan that includes all holiday expenditures—from presents to decorations and food for holiday meals. This can be a powerful way to avoid overspending, as it will tell you up front how much to spend on gifts per person as well as how much it will cost to host dinner for family and friends.
   
2. Shop with a Plan: When writing your gift list, include ideas for each recipient so that it will provide greater direction when you go the mall. Once you have created your shopping list, keep it in your purse or wallet. When you see the right gift at the right price, purchase it and then check it off the list. After that, do not buy anything else for that person. If you spot another perfect item, make a note to keep an eye out for the next birthday or holiday.
   
   Back at home, designate a closet, empty chest of drawers, or laundry basket as a holiday gift repository. Tape a copy of the list nearby and check off the names of each person as you put their gift in that repository. This will be a visual reminder of the shopping you’ve already accomplished and how much you have left to do.
   




3. Buy Treasures, Not Trophies: It’s better to get gifts a recipient will treasure rather than “stuff” to fill the stocking. For larger groups and families, there are a few options for reining in expenses. Collaborate with other family members or friends in the group to pool resources and get a more expensive gift that will be cherished. Or try a Secret Santa game where each person only buys 1 gift for the person they were assigned—this way instead of buying 7 different gifts, there’s more money to focus on a single perfect present.
   
4. Shop Early in the Season: When people wait too long, they tend toward impulsive purchases that can be expensive. Shopping under pressure makes it harder to say “no” to items that cost more than originally budgeted. Plus, by shopping early, there’s more time to enjoy the season.
   
5. Watch “Reward” Offers: Many retailers offer tiered rewards in relation to the amount you spend—for example $5 off a $50 purchase, $15 off of a $100, or $35 off of a $200 purchase. This is the gamification of spending so that you will feel like your saving more even though you’re also spending significantly more than you intended. Of course, if you were planning to spend over $200 at a particular retailer anyway, then this is a great deal. A smart rule is to only use rewards for purchases you were planning to make without the special offer. That’s the only way you will truly end up saving on your budget.
   
6. Take Advantage of the Big Sales: From Black Friday through Cyber Monday, you can get some amazing bargains if you’re prepared. First, ensure an item is on your list, then check which stores will be offering it at the best sale price. Sign up for newsletter emails from your favorite stores to get advance notice about special sales and insider-only deals. Also, many deals will be listed in advance on:
   • www.BlackFriday.com
   • www.CyberMonday.com

7. Leave Your Credit Cards at Home: Ideally, shop with cash or a debit card to avoid maxing out your credit cards. Shopping with credit cards makes overspending a huge risk, plus many studies show that people spend more when they pay with credit. If you are not comfortable carrying cash or if you do not have a debit card, then use only one credit card and keep a running tally of your purchases.
   
8. Avoid Applying for Store Charge Cards: Store-brand charge cards may offer a significant day-of-purchase discount or a period of no-interest on day-of-purchase items, yet these cards often come with high interest rates as well as other fees. If you do not repay the full balance the next month, the interest charges could equal or outweigh what you save at the register! Plus, applying for a new credit card usually involves a credit inquiry and that inquiry may lower your credit score. It’s always better to pay cash or use a debit card—or use a credit card you already have if you can repay it in full by the due date.
   
9. Use Savings Apps: If you’re shopping online, enter the item into Google and click the Shopping tab to see the lowest price (including shipping costs). Other tools that help you find the lowest price easily include apps such as ShopSavvy (iOS, Android) and RedLaser (iOS, Android)—they let you scan a product’s barcode or QR code to find if other stores or sites have better deals on the item.
   
10. Get Free Shipping: Many retailers offer free shipping for holiday purchases; although, sometimes there is a requirement for a minimum purchase amount. Overall, during the season, shipping costs should be least costly expenditure on your list.
    

If you’re still paying down debt from previous credit card debt and worried this holiday will only get you deeper in debt, reconsider giving gifts at all! The people in your life who truly care for you would rather you keep your money than put yourself deeper in debt just to show them you care.

Getting into unmanageable amounts of debt doesn’t just happen because you spend too much over the holidays. Typically, it’s a hardship or unexpected large expense that pushes things over the edge. But the more you can control your spending and keep your credit card debt under control, the more you can protect yourself from sliding down a slippery slope into heavy debt.