Last year’s holiday season was marred by a raging pandemic. And because COVID-19 vaccines were not yet available, many people had to spend the holidays apart from family.
Things are different this year, thankfully. Vaccines are widely available and the economy is in better shape. As such, a lot of people may be making big plans for the upcoming holidays – plans that could wreak havoc on their finances if they aren’t careful.
In a recent American Express survey, 38% of consumers said they’ll spend more on the holidays this year in anticipation of a more celebratory season. On the one hand, that’s a good thing, because the holidays are supposed to be a happy, positive time. But the last thing consumers need is a pile of credit card debt to close out the year.
If you expect to ramp up your holiday spending, here are a few steps you can take to avoid landing in debt along the way.
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1. Get a side job to drum up extra cash
You may only have so much wiggle room in your paycheck to spend more on the holidays. But if you were to increase your paycheck, you might manage to buy everything you want, from plane tickets to gifts to a decked-out tree, without racking up a huge amount of debt in the process. And a good way to increase your paycheck is to work a side gig for the next few weeks.
Many businesses need extra help for the holidays, so you may have a fairly easy time finding evening or weekend shifts locally. And there’s always the option to sign up for a side hustle like driving for a ride-hailing company or pet-sitting.
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2. Offset higher spending with a credit card sign-up bonus
Maybe you’re planning to spend an extra $600 on the holidays this year. Well, if someone were to hand you a $300 check, that would make it easier, wouldn’t it?
Believe it or not, there may be a way to snag a lump sum of cash for the holidays – apply for a new credit card and score a sign-up bonus. Many credit cards offer these bonuses for meeting a certain spending threshold within a few months of opening a new account.
Let’s say you find a credit card offer where spending $1,500 within three months of opening your account will score you a $300 bonus. If you put all of your holiday purchases on that card, you might easily meet that spending requirement and collect a pile of cash in the process.
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3. Set priorities
Planning to do more celebratory activities around the holidays is a good thing. But if you want to avoid debt, you may need to set some priorities.
You may not have the money to swing a trip home for both Thanksgivingand Christmas, in which case you may have to decide which you’d rather travel for. Similarly, if you normally host two big parties or meals, you may need to scale back to one if you’re planning to spend more on travel or gifts.
Make a list of your upcoming holiday expenses and compare them to the amount of money you have available to you. Then, order those expenses from most to least important so you can focus on the ones that top your list.After a somewhat bleak 2020 holiday season, we all deserve a festive 2021. Just do your best to avoid racking up a huge amount of debt in the process, because nothing takes away from a celebration like the stress of owing money.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.American Express is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman owns shares of American Express. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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