featured
2024-12-09
Budgeting
published
featured
2017-04-24
category
published
3 minutes
Jingle Bills: How to Avoid a Holiday Debt Hangover
The holidays are here, bringing that familiar urge to spend a little extra on the people we love. It’s a good feeling…until the bills arrive. With thoughtful planning, you can keep your holiday joy intact without taking on holiday debt.
Start with a Holiday Budget (and Stick to It!)
It sounds like a buzzkill, however, creating a holiday budget is actually liberating. Instead of worrying about where all your money went, you can confidently enjoy the festivities, knowing you’ve set boundaries. Make a list of everyone you plan to shop for and set a spending limit per person. Don’t forget the “extras” (decorations, meals, travel expenses, etc.).
As a rule of thumb, it’s wise to aim to spend no more than 1.5% of your annual income on holiday expenses. For example, if you make $50,000 a year, try to keep holiday spending under $750. This percentage can be adjusted based on what’s realistic for your situation. Having a target can be incredibly helpful.
Don’t Get Caught Up in the “Buy Now, Pay Later” Trap
“Buy now, pay later” (BNPL) options have exploded. Services like Afterpay and Klarna offer small, interest-free installment plans that seem harmless, and these little debts add up. A survey by Credit Karma found that 38% of U.S. consumers who used BNPL services missed at least one payment, and nearly three-fourths said they saw their credit scores drop as a result. If you’re tempted, ask yourself if you’d buy the item outright if you had the cash in hand. If the answer is no, it’s probably best to skip it.
Add the WyHy 0% Visa to Your Holiday Toolkit
While holiday expenses can add up quickly, there’s a smart way to manage them without the stress: the WyHy 0% Visa Credit Card. This card offers 0% APR on balance transfers and purchases, making it a perfect companion for your holiday shopping. Whether you're checking off your gift list, preparing a festive feast, or tackling travel expenses, the 0% Visa helps you keep costs in check without accumulating high-interest debt.
Take advantage of this limited-time offer to spread out your holiday spending and start the new year on stronger financial footing. It’s our way of helping you keep the joy in the season without worrying about the bills afterward.
Get Creative with Gifting
Homemade or personalized items often mean more to loved ones than store-bought gifts. Put together a “Movie Night” gift basket, offer a "free night of babysitting" coupon, or create something if you’re artistically inclined. These ideas cost less while allowing you to give something heartfelt. If you’re celebrating Christmas with family, opt for a Secret Santa, so everyone buys just one gift instead of one for each person.
Plan for Next Year
If this year’s shopping is already underway, start planning for the next holiday season. Small steps, like setting aside $20 or $30 a month, can add up by the time next year’s holiday season rolls around. You’ll have a holiday fund ready to go!
Bottom Line: Keep It Simple and Savor the Season
Remember that the holidays are about spending time with loved ones, not just spending money. Connect with your financial institution to see what resources they offer to support your goals this season. GreenPath Financial Wellness also offers free financial counseling and a personalized Debt Management Program designed to lower your interest and help you pay down debt sooner.