Can you avoid a New Year's Day hangover? We're not referring to the traditional hangover that comes from too much alcohol, but the financial hangover that comes from too many charges on your credit card.
Of course, you can avoid a New Year's credit hangover – especially with some help. Consider these eleven ways to keep holiday purchases under control.
1. Set a Holiday Budget – Review your overall budget, and then decide how much you can afford to spend for holiday gifts given your other expenses (including end-of-year expenses like property taxes and annual subscriptions). Don't let gift expectations drive your budget – let your budget set gift choices.
2. Make a Gift List – Divide up your gift budget among all your recipients and find gifts that fit within the desired budget. Start early, so you have time to look for the best prices.
3. Stick to Your Gift List – Lists help prevent impulse buying. If you need extra help, use the buddy system for support. Take a trusted friend to swat unwanted purchases out of your hand before you reach the register (or gently take the breakable ones away and place them back on the shelf).
4. Keep Track of Expenses – Track your expenses as you go. You'll know whether you can afford a little excess in one area or if cutbacks are needed before you overspend.
5. Use Coupons/Promotions – Keep an eye out for special holiday promotions and any coupons or store-specific deals that fit the items on your list. (You did make a list, didn't you?)
6. Avoid Credit Cards Entirely – Can't stop impulse buying? Leave your credit cards at home when you shop. Have somebody hide your cards. Freeze them in a block of ice if you must. Stick to debit cards and cash (or, if you prefer, a prepaid credit card), and only take a set amount with you.
7. Comparison Shop – One store or website will not have everything you need at the best price (sorry, Amazon and Walmart). Compare deals online and use price history websites so you can separate good deals from overpriced promotions.
8. Avoid Procrastination – When you're staggering through the store on Christmas Eve desperately looking for inspiration, money is no object. Avoid panic and overpaying by shopping early, which also gives you sufficient time to comparison shop. (Did we also mention a list?)
9. Lower Your Credit Limit – This isn't the best choice, as it implies that you'll max out your credit cards and harm your credit score – but if that's what it takes to avoid overspending, a lower credit limit could be worthwhile. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
10. Optimize Rewards – If you're going to spend a lot, get back as much as you can in the process. Tailor gift purchases to your credit card reward programs where possible. You could redeem points for merchandise that you can use as a gift, acquire gift card rewards as stocking stuffers – or replenish your cash supply with cash-back rewards to apply to January bills. If you want more credit, check out our list of rewards credit card offers.
11. Optimize Online Purchases – Online deals such as free shipping can make up for a slightly higher price – and failure to take all taxes and shipping charges into account may push your spending higher than you realized. Double-check all charges and grand totals before the final click of acceptance.
With these tips, you can avoid a credit hangover and financial pain on January 1st. You're on your own to avoid a traditional hangover and physical pain on January 1st – or, if it was an exceptional New Year's Eve party, on January 2nd.
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