Don’t Let the Holidays Melt Your Debt Snowball

Happy holidays!

That’s what we all want, right—happiness during the holidays? Just watching all the ads on TV makes it seem that happy holidays have to come with a price tag. 

We, as consumers, are led to believe we need to purchase all kinds of different things in order to assure that everyone has a happy holiday or a merry Christmas. Recent surveys indicate that the average American shopper will use debt to purchase gifts to the tune of $800 to $1,000. That’s expensive happiness! More than 82% of that will be purchased using credit cards or store cards. The other 18% includes personal loans, payday loans, and even home equity loans.

Of those who use their credit cards to purchase gifts, more than 25% of them plan to make just the minimum monthly payments. That means they will be paying for this year’s holiday happiness for years to come—long after the happiness wears off. But what happens if you’re already in attack mode and trying to reduce your debt? If you aren’t cautious, that carefully packed and rolling debt snowball can start melting—or even disappear—during the holidays.

Related: The Debt Snowball: A Proven Plan for Getting Out of Debt

So what can you do to stay focused on your debt snowball while still spreading some holiday cheer? Here are three quick ideas:

Plan Ahead

Take a look at your calendar and identify all the events you will participate in during the holidays. Will there be events or parties where you will need to bring a food item? What special events will your kids be involved in? Will you mail any holiday cards or postcards? Can you hand-deliver any of those cards? If you’re going to send gifts out of state, gift cards are cheaper to mail than packages. Do your best to anticipate anything for which you will need cash.

Budget for It All

After you identify all the possible holiday expenses, take some time to create a budget for those items—not just for the presents. Once you have a budget, make sure you stick to it. Remember, one of the purposes of a budget is to give you the freedom to spend some money. Just make sure you plan for your spending while still attacking your debt snowball. Look for ways to trim your lifestyle spending or ways to earn a few extra bucks to fuel your holiday expenses.

Related: 3 Steps to Help You Prepare for Holiday Shopping

You’ve made great progress with your debt snowball, so don’t sacrifice your momentum by adding more debt. That’s the same as rolling your snowball back in the other direction and losing snow. That’s just not smart—and it makes for a sad snowball.

Pump the Brakes

When finances are tight, and especially when you are in gazelle-intense attack mode with your debt snowball, communication with your family and friends is very important. Explain the situation and look for some creative, low-cost gift ideas.

Sure, that advertised hoverboard would be cool . . . for about three weeks. The joy of the gift may wear off, but the pain of having to pay for it will hang on for weeks and months. Talk about a financial hangover!

Crafting, baking, and writing personal notes of appreciation are always great choices. Search the Internet for some creative gift ideas that won’t break the bank or put you in debt.

Just remember that going into debt won’t buy happiness. True happiness doesn’t come from the things you buy. Happiness is being debt-free and able to give generously because you can afford it. Don’t lose focus on your debt snowball during the holidays. Just think how good it will feel to be out of debt!