The Pitfalls Of Holiday Debt (And How To Avoid It)

The holidays can be as worrying as they are cheerful, especially if you are among the nearly 40% who say they are most stressed by the thought of going into holiday debt.

And while it’s easy to fall into holiday debt, there are clear-cut steps to avoid it. In doing so, you may protect your financial well-being for years to come.

Why Holiday Debt Is So Common 

Spending on average goes up during most holidays, but it’s particularly prevalent during holidays such as Thanksgiving, Hannukah, and Christmas.

Nearly 97% of people purchase gifts during the holidays. Others spend a good chunk of cash on travel, food, and party-hosting. Spending seems unavoidable. Overspending is easy. 

But going into debt during the holidays can have far-reaching implications. Depending on the situation, it is not unheard of to spend years paying off holiday debt.

And since many take out new credit cards to pay for holiday expenses, high-interest rates come into play when it takes even just one month to pay back debt in full. In short, it adds up even more quickly than other forms of debt throughout the year.

man with credit card going into holiday debt

How To Avoid Holiday Debt

Whether you’ve gone into debt before or are worried this year may be harder to manage than others, there are several steps to take to minimize the risk of falling into holiday debt.

Create A Holiday Budget

It’s not the most groundbreaking advice but creating a holiday budget in the same way you create a typical month-to-month budget will help keep your holiday expenses in check while considering any financial goals you have for the immediate future.

Use your previous holiday spending as a guide, and make some adjustments based on if you spent too much in certain categories and if there are common expenses that you can cut back on — even just a little bit.

Reconsider What You Spend On Gifts 

Gifts typically make up most of one’s holiday debt, so that’s a good place to start to avoid debt pitfalls. If you’re spending too much on certain gifts every year, it may be best to find alternatives.

Try setting a spending limit on gifts this year or go with more homemade gifts that have the extra appeal of being one-of-a-kind. You may even talk amongst family and friends and decide to forgo gifts completely this season.

Don’t Neglect Other Forms Of Debt

If you’re one of the many people who will go into the holidays already holding a lot of debt, it’s a must to keep up payments even when spending more during the season. That can be tough, but it’s the only way to avoid turning your mole-hill debt into a mountain.

Cut Back On Credit Cards Use 

With so many expenses related to the holiday season, it’s easy to send your credit card into overdrive. Don’t. When you set a budget for the holidays add up your estimated expenses and stick to not going over that number.

One approach is taking out the set amount in cash and setting your credit card aside for the entire holiday season. When you run out of cash, you also stop spending. 

Use Sales Coupons To Your Advantage 

You can save hundreds every holiday by doing a bit of research into when sales will begin, if you can get cashback on certain items or whether you can use coupons on what you need the most this year.

By comparison shopping and waiting to get the best deals possible, you can seriously cut back on the amount of holiday debt you typically accumulate. 

man getting fast online title loan cash

Get Help When A Financial Emergency Hits

While managing holiday debt is within your grasp with just a few spending habit tweaks, it can seem unmanageable when a financial emergency strikes at the same time. Having to pay for an emergency room bill or unexpected car or home repairs can turn a dream holiday into a nightmare. 

One option for help is an online title loan, which uses your vehicle’s lien-free title to qualify for a short-term loan designed to help with financial emergencies that are paid back over time.

At Missouri Title Loans, Inc., it may take as little as a half-hour to qualify for a loan of up to $15,000. And you can get the cash you need either the same day or the next business day.

Here’s how it works: start online, have your state-issued ID ready, along with your vehicle for inspection and the lien-free title to that vehicle. Once you have the simple requirements at your disposal, fill out the short online title loan form on our homepage and a loan representative will give you a quick call. During that call, the representative will go over the next fast steps to securing a title loan as soon as possible. 

Get Started Today!

With a little discipline and creativity, it’s easy to avoid falling into holiday debt this year. But if you are coping with a financial emergency as well, one option for relief is an online title loan from Missouri Title Loans, Inc.

If you would to request a loan today or find out more about an online title loan, start online, give us a call, or visit us today.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Louis Tully

Louis Tully is a full-time finance writer offering financial expertise to everyday consumers. He understands the core values of finance and used his writing talents to share his own experiences with money to his readers. His articles teach how financial failures can easily become successes by making new habits and creating realistic goals.