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Five Ways to Kick Debt and do the Holidays Different!

I love Christmas and the holiday season. I love everything about it—the food, the cookies, the holiday movies, gift giving, and don’t forget about the Brandy Slush in the National Lampoon’s Christmas Vacation moose mugs! Ah, the holidays are so much fun!

There's something I hate about the holidays though. I hate that many people are going into debt to afford their gift giving this year.

Check out some of these numbers:

  • Holiday retail sales are expected to increase by around 4% this year, adding up to a whopping estimated $730 billion. That breaks down to an average of $1,048 per person.
  • According to the SunTrust Holiday Survey, 43% feel pressured to spend more than they can afford this season.
  • Nearly seven in 10 Americans (69%) said they would skip exchanging gifts this holiday season if their friends and family agreed to it, according to a new survey conducted online by Harris Poll on behalf of SunTrust Banks, Inc.
  • A majority of those who spend time buying or making gifts (60%) said they would spend more time with friends and family if they didn't have to worry about gifts.

These numbers are sad! The holidays are about getting together with friends and family and celebrating life, not going into debt and digging ourselves into a deeper financial hole. Wouldn’t it be amazing to get through the holidays and not have to worry about those January credit card bills? So how can you kick debt and do the holidays different this year? Here are five tips to get you started.

Make a list, and check it twice!

According to recent Gallup poll, 67% of households don’t have a working budget. That means that many of us attack the holiday shopping season without a plan. I just want to let you know that won’t work! First, set up a budget for the holidays. How much cash do you have to spend? Who do you want to buy for? List the people you want to buy for in order of importance, then assign a dollar amount to those people. Here's the key to staying on budget—when the money runs out, it runs out. You just stop buying presents. No pulling out the credit card.

Play defense, and put your holiday blinders on.

I talk about this a lot because it's easy to look past, but marketing is good! So good that these stores can get us to buy junk that we never had any intentions of buying. When you shop, whether it's in the store or online, you have to be aware of their marketing tricks and stick to your plan. Ignore the noise and play defense. This is why step one is so important. This will prevent you from overspending or spending money you don’t have.

Spend time, not money!

Instead of thinking about what things you can fill people's lives with, why not fill their lives with more of you? The best gift you can give anyone is your time. This is excellent news if you're looking at your bank account and stressing about how you can afford the holidays this year. Remember the statistic I mentioned above and save yourself a bunch of money and just spend some time together.

'Tis the Season for more hours. It’s mid-November, but you still may be able to find some seasonal work that will help you bring in some extra cash for the holidays. If you can’t do a part-time job, consider selling some things around your house that you don’t use anymore. Selling stuff is a popular one in Roots of Personal Finance that helps our members come up with a lot of extra cash. Or, maybe consider re-gifting new items you never used or gently used items to save on holiday expenses.

Start saving now. This last tip won’t help you this year, but it’s never too early to start thinking about next year. As I mentioned, the average person is likely to spend upward of $1,000 on holiday expenses. If you started saving $84 a month until this time next year, you would have more than $1,000 saved. Pretty awesome, right? If you're feeling stressed about how you will afford the holidays this year, this can be the last year you feel that way by coming up with a savings plan that will kick that stress to the curb. $84 per month, you can do it!

According to a recent American Psychological Association Stress In America Survey, money and personal finance have been known to be one of the leading causes of stress among Americans. Don't let the holidays add on even more pressure. Make a plan, use cash, only buy what you can afford, and stay away from debt! 

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