The holidays should be a joyful time for you and your loved ones. This is the time for the “yuletide” good cheer and optimist hopes, and a time to reflect upon the past year and the future. However, for many families these times are not so pleasant as they struggle to find the extra cash for those holiday expenses. Of course credit cards can solve the problem, but they create a myriad of other problems.

Most families in metropolitan Detroit do not plan to increase their balances on their credit cards during the holidays; unfortunately it just happens. In fact, credit card companies make it so easy with the convenience of “buy now, pay later” with a great holiday rate. Some credit card companies may even sweeten the deal by letting their very best customers skip a payment or two during the holiday financial crunch. Others may entice their customers to pay back only the minimum balance or reduce the minimum payment. There are two simple words of advice — caveat emptor or “buyer beware”; if it sounds too good to be true, it is.

Mary Doe used her credit cards for her holiday shopping throughout the month of December. Each time she conveniently swiped her card and signed her name, she promised to pay the debts off by the end of February. Winter turned to spring, and spring to summer, and by July she is still paying on those holiday gifts that seemed like such good ideas at the time. Sadly for Mary, those great bargains ended up costing her much more than she thought due to the credit card interest. By the time December rolls around again, Mary’s still paying for those debts, along with the obligations developing from the family summer vacation in August. The vicious, never-ending cycle repeats.

Like Mary and many others, this never-ending cycle repeats year after year. Plus with so much purchasing done at one time, it is easy to forget about the debt obligations adding up. There are times when the convenience of credit is necessary, but holiday gift buying is not one of those times. To avoid the holiday woes from credit obligations and enjoy more peace of mind for the new year, here are a few tips:

Plan ahead

Plan ahead by making a list of all the people you want to give gifts to and how much you can realistically afford to spend on each one. Don’t forget those little things that also add up such as cards, stamps, wrapping paper, gift bags, stocking stuffers, decorations, etc. And don’t forget those non-family members and close friends that you need or want to buy gifts for such as co-workers, volunteers, childcare providers, teachers, etc. Then total all the gift, wrapping and decoration projections to make sure it doesn’t exceed your financial abilities. If it has been a financially burdensome year, consider talking with family and friends about gift alternatives.

Start looking for bargains early. If it’s been a tough year for you, think about cutting back on what you usually spend. Talk with friends and family about creative ways of showing your gratitude to one another.

Creative Ways of Reducing Your Gift Expenses

1. Drawing names
2. Making gifts
3. Setting specific limits
4. Ornament or snack exchange

Be a smart shopper
Before you start spending, start window-shopping. Leave the cash and plastic at home, and trudge out to the shopping scene to compare prices and value. Prices vary across the board from store to store depending on the set point of prices, discounts and other promotions. In late December prices are better, but the selection is not always so great. Also there are many discount retailers that carry brand name, bargain priced products. Once you have all of these decisions made, then you’re ready to make those purchases.

Decide how you are going to pay

The best method to avoid the holiday woes is to use cash and leave those credit cards at home. Fifth Third Bank makes this even more convenient with a Goal Setter Savings Account. It was created to help put this advice into practice by helping you to save a little bit at a time, keeping your savings separate from your everyday money.

If you have to use you credit, then use it wisely. The best recommendation is to use only one card for your holiday purchases. The spending on one card is easier to keep track of than those of multiple cards.

Keep a log of your credit card spending, similar to a check register. Every time you make a purchase, record it in your log.

As you plan your holiday spending, keep your perspective of the true meaning of the holidays. The most meaningful gift you can give to someone is one that comes from the heart. The best gift you can give yourself is not being burdened with debt into the next year.

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