The holiday season can be mixed with equal amounts of both happiness and stress. The gift of giving can be a wonderful feeling when you see your child’s eyes light up in response to that one gift they really wanted. Sitting down to a nice dinner with your loved ones and enjoying their company also leaves us feeling joyful and content. But holiday shopping madness and the considerable toll it takes on our finances can leave us with massive amounts of stress. And once the bills from all those gift purchases start rolling in, the holiday “hangover” can hit us like a ton of bricks.

Using credit cards to purchase gifts for our friends and family is an attractive option for many of us. It is all too easy to pull out the plastic and convince yourself “I’ll just pay this off later.” But let’s put this into perspective. If you charge $1,000 in gifts on a credit card with a 15% interest rate and 3% minimum monthly payment, it will take you more than three years to pay off making the minimum payments, total interest paid – $250! If you charge $2,000 in gifts, it will take you more than six years to pay off with over $950 in interest!

There are a few tips you can use, however, which can help you avoid this holiday “hangover”. See below for a few suggestions on how to come out of the holidays with your finances intact:

• Make a Detailed List: You stand a much better chance of making budget-wise gift decisions if you avoid impulse purchases while at the mall. Compile a list of everyone you plan to buy for, and list your desired gift for each. This will make your shopping excursions easier and will avoid hectic and expensive last minute shopping trips.
• Do Your Research: The internet is a great resource for finding bargains on gift purchases. You can easily compare similar products to select the most appropriate purchase, and can find the best deal available in just a few minutes. Purchasing items via mail order also helps you avoid costly and stressful trips to the mall.
• Setup a “Christmas Club” Savings Account: Planning ahead and thinking about next year is a great way to minimize the crunch holiday gift giving puts on your credit cards. By opening a special “Christmas Club” savings account you can spread the holiday expenses over the course of the year, making them much easier to manage.

Stick with these suggestions this year, and make sure your holiday hangover comes from eggnog and wine – not credit card debt.

Related Posts:

1. Holiday Madness: 4 Tips for Surviving Holiday Shopping
2. Setup a Christmas Club Account for Next Year’s Gift Giving
3. Impulse Buying: Increasing Your Waistline and Credit Card Debt
4. Save Money by Shopping: Post-Christmas Deals
5. Top 6 Reasons for Credit Card Debt