5 Strategies to Help You Manage Holiday Debt

With all the excitement that surrounds the holidays, it can be easy to lose track of how much you're spending on gifts, travel, food, and other expenses. Come January, that can mean bigger than expected bills that can put a strain on your budget. With a little planning, you can keep your expenses down and still enjoy the holidays with friends and family. There are many ways to keep holiday spending on budget, including these five strategies.

1. Figure out how much you can afford to spend

Sit down and make a holiday budget. Write down all the expenses you expect, including gifts, mailing gifts and cards, food for special holiday meals and get-togethers, travel, decorations, cards and wrapping paper. If you usually make donations to charity as part of your holiday traditions, add that amount to your budget. Once you know what your expenses will be, check your savings to see if you have enough to cover your costs. If your costs are too high, look for ways to save:

• Consider staying with friends or family rather than in a hotel
• Ask guests to bring a dish to share at your holiday meal
• Give homemade gifts rather than costlier store-bought ones

2. Cut expenses to help fund holiday spending

You can put some extra money in your holiday budget by cutting expenses in other areas of your life. Bring lunch to work instead of buying it. Skip take-out and trips to the movies. Put the money into your savings account so it's available when it's time to pay holiday bills. Now is also a good time to start planning for next year's holidays. If there's room in your budget, have a small amount of each paycheck transferred into a savings account so you can have some money to work with next year.

3. Shop early and look for deals

Despite the hype, Black Friday sales do not always offer the best savings. Comparison shop and check for in-store and online coupons. Look for interest-free layaway plans or, if you have unused gift cards, use them to pay for gifts. If you can't find the gift you planned to buy at a price that fits your budget, be willing to consider other options or ask family members if they'd like to band together to give a higher priced item as a group gift.

4. Book your travel early

The cost for flights, hotels, car rentals, and train tickets may rise closer to the holidays. If you're planning to travel this holiday, keep an eye out for fare sales and other promotions that can save you money. If you can, consider traveling on off-peak days or times to get a better deal.

5. Pay with cash rather than credit

The best way to avoid a big credit card bill in January is to pay with cash or your debit card when making holiday purchases. In fact, paying with cash can be a good strategy to help you avoid overspending since you can only spend what you have in your wallet.