How to avoid getting into debt
Last year’s holiday season was marked by a raging pandemic. And because COVID-19 vaccines were not yet available, many people had to spend the holidays away from their families.
Fortunately, things are different this year. Vaccines are widely available and the economy is doing better. As such, many people can make big plans for the upcoming holidays – plans that could wreak havoc on their finances if they’re not careful.
In a recent American Express survey, 38% of consumers said they would spend more on holidays this year in anticipation of a more festive season. On the one hand, that’s a good thing, because the holidays are meant to be a happy and positive time. But the last thing consumers need is a bunch of credit card debt to end the year.
If you’re planning on increasing your vacation spending, here are some things you can do to avoid getting into debt along the way.
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1. Find a side job to raise extra money
You may only have limited wiggle room in your paycheck to spend more on vacation. But if you were to increase your salary, you might be able to manage to buy anything from plane tickets to gifts to a decorated tree without going into huge debt. And a good way to increase your salary is to work a concert side for the next few weeks.
Many businesses need extra vacation help, so you may have enough time to find evening or weekend shifts locally. And there is always the possibility to register for a secondary activity like driving for a transport company or looking after animals.
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2. Compensate for higher expenses with a credit card sign-up bonus
You may be planning to spend an extra $ 600 on vacation this year. Well, if somebody gave you a check for $ 300, that would make it easier, wouldn’t it?
Believe it or not, there might be a way to get a lump sum for the vacation – apply for a new credit card and get a sign up bonus. Numerous credit card offer these bonuses to reach a certain spending threshold within a few months of opening a new account.
Suppose you find a credit card deal where spending $ 1,500 within three months of opening your account will earn you a bonus of $ 300. If you put all of your vacation shopping on this card, you could easily meet this spending requirement and collect a stack of cash in the process.
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3. Set priorities
Planning more festive activities during the holidays is a good thing. But if you want to avoid getting into debt, you may need to prioritize.
You may not have the money to go home for Thanksgivingand Christmas, in which case you may need to decide which one you prefer to travel for. Likewise, if you normally have two large parties or meals, you may need to cut one down if you plan to spend more on travel or gifts.
Make a list of your upcoming vacation expenses and compare them to the amount of money you have available. Then rank those expenses from most important to least important so you can focus on the ones at the top of your list. After a somewhat bleak 2020 holiday season, we all deserve a festive 2021. Just do your best to avoid getting into too much debt. in the process, because nothing takes away from a celebration like the stress of owing money.
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We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the advertisers included. The Ascent does not cover all the offers on the market. Editorial content for The Ascent is separate from editorial content for The Motley Fool and is created by a different team of analysts. 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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