Don't let debt ruin your holiday season

AJ Smith

While the holiday season conjures thoughts of joy and family celebration, for those in credit card debt, it can be a stressful time. This year, don't let spending and debt fears interfere with your cheer. Consider the following ways to manage and reduce your personal debts while enjoying holiday traditions.

Tackle everyday expenses

Before you start spending, it's important to figure out exactly where you stand financially right now. This includes assessing your current debt. You may have a general idea of what you owe, but writing it all out with dollar figures can make it real. Include everything from your mortgage and credit card to your student loans and that $10 you owe a friend to get a full picture.

Generally, it's a good idea to pay off debt with the highest interest rates first and pay on time, with more than the minimum due. Some people prefer to pay off the smallest debt first (remember that $10 you owe a friend) to start crossing things off the list. Whichever path you choose, the idea is that you are focusing on debt repayment. Once you have a plan in place, you can think about spending more purposefully this holiday.

Holiday budget

Make a list of people you plan to buy for this holiday season. Include what gifts you would like to buy them or how much money you plan to spend. This can help you develop a budget. If you don't know exactly what to get everyone on your list, leave a few similarly priced options.

It's important not to let your feelings (you want loved ones to feel loved or thrilled by their presents) compel you to spend more on gifts than you can realistically afford. Your family, friends and loved ones will understand your situation and appreciate any effort regardless of the price tag. Stick to your list and try to avoid impulse spending. If you see something great for someone but you've already bought their present, make a note for next year or for that person's birthday.

The best advice is to start your holiday planning and shopping early (of course, now that advice is for next year). This can spread your purchases over several months and allow you to comparison-shop.

If you can't do that, include a category for gifts in your yearly budget. This can include birthdays and holidays and then be spread over 12 months. So if you are setting aside a certain dollar amount each month into an account for this purpose, you can pay with cash when it's time to buy.

Be creative

Another great way to limit spending is making use with what you already have. If you have lots of credit card debt, you might also have lots of credit card rewards stocked up. See if these can help you get gifts or be used to travel during the holidays.

Homemade, DIY gifts and decorations save you time and money, but can be appreciated even more than store-bought items because they are more personal. Also, consider some free activities you and your family can share, and even try using these as gifts.

Plan an ice skating trip with your niece or nephew or promise a romantic evening in the new year for your spouse. This means no spending now and thus, no more debt. Fun doesn't have to come with an anxiety-inducing cost.

Give bill dates priority

No matter what holiday craziness is distracting you, it's important to pay your bills on time. If this is impossible, contact your creditors and let them know you are struggling to make ends meet. Tell them why it is a difficult time for you and see if they can work out a modified payment plan to a more manageable amount and timetable.

Make the most of post-holiday sales and consider gifting in January (or giving gift cards that are likely to buy much more after the holidays) as a way to stretch your dollars. For the most part, the items will not change, but their prices will. This can be really helpful if you are in debt.

The cost of maxing out your credit cards during the holidays can linger long after the holidays because of the impact it can have on your credit score. And bad credit can cost you thousands over your lifetime. You can see how your credit card spending is affecting your credit scores for free on