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Start Planning Now to Avoid Debt this Year

For many of us, December is the time of year that we spend our money, and by the time January comes around, we’ve spent more money than we have. Dinners, parties, gifts, fancy attire, charitable donations, decorations, travel – all of these expenses add up fast, so here’s a New Year’s resolution for you:

Plan ahead to ensure a debt-free 2013.

Using a credit card for all of your purchases is the leading cause of debt. Cashless spending can make it hard to keep track of how much money you have and how much you have already spent. To avoid digging yourself into a hole this year, below are some useful guidelines you can put into practice starting today:

  1. Make a list. Santa isn’t the only one who needs a list. We all have a lot of plans for 2013, not the least of which is the next holiday season. By making a simple list of what you need to spend money on and sticking to it, you can save yourself a lot of debt-related headaches in the New Year.
  2. Create a budget. Mark down in your planner what you think is necessary to spend on gifts, food, attire, travel, decorations and donations, respectively, and when the time comes to make those purchases, stick to your budget.
  3. Start saving early. Now take a look at your budget and start saving! If you save money in advance, chances are you won’t need to use your credit card since you should have ample funds available for your various expenses.
  4. Start shopping early. It might seem like “jumping the gun”, but if you keep your eyes open all year-round for some really good deals, you can save a lot of money, especially on holiday-themed decorations.
  5. Don’t shop for yourself. This mentality will lead to over-spending. Focus on sticking to your budget and your list, and avoid unnecessary debt. If you have any money left in your budget for self-indulgence, then go for it… but wait until Boxing Week to potentially get more for the your money.
  6. Don’t fall for big sales. A lot of the time they will just entice you to spend more than you originally anticipated. “Buy 2, Get 1 Free” sounds great, but not if you only planned on buying one item.
  7. Shop online. The internet offers another cost-effective way to shop around as you can find some great deals that you can’t find in stores.
  8. Focus on the big picture. Next December, think about what the holidays are really about – spending quality time with family and friends, and being grateful for their presence in our lives. If you keep this in mind, you’ll spend less time shopping in stores or online and more time with your loved ones.

How do you plan to avoid debt this year? Leave a comment below or join the conversation on our Facebook and Twitter pages.

Wishing you a very happy, healthy and debt-free 2012 – from the Payza team!