How to Manage Holiday Spending and Avoid Debt – NBC Boston

The holiday season is here – a time when many Americans tend to overspend trying to find the perfect gift to share with friends and family.

According to NerdWallet’s 2024 Holiday Spending Report, nearly three in 10 borrowers are still working on paying off debt from last year’s purchases.

This year you don’t want to be haunted by the ghosts of Christmases past.

According to a survey by Debt.com, 66% of consumers plan to take on debt for holiday shopping this year – a move experts say is very risky.

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Tara Alderete is the Director of Corporate Learning at Money Management International – a nonprofit organization that provides debt management plans and financial education.

“If you incur debt during the holiday season, you want to pay it off as quickly as possible,” Alderete said. “You can get this under control early on, you’re ahead.”

To avoid a holiday spending hangover, you need to first examine your spending habits — before it’s too late.

“I’m in the middle of preparing for the holidays and have already spent more than I planned. That’s why I’m going to prioritize. Maybe for me it is more important to travel than to give larger gifts,” Alderete explained.

Alderete said consumers cannot ignore the signs that they are overspending. If it’s more than you can afford, that’s a red flag.

“If you find yourself transferring money from other accounts that you didn’t plan for: ‘I’m just going to withdraw a little from my savings account or my overdraft account,’ that can be a red flag. And then use credit for everything,” Alderete said. “When you identify them, you just go back to that plan, do the revision and go from there. But these are all things to pay attention to.”

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Don’t be afraid to talk to your friends and family about your budget if money is tight.

“When you start talking to your relatives and your loved ones, and you start the dialogue by saying, ‘Hey, maybe we could give a little less presents this Christmas, maybe we set a limit, maybe we do an exchange. ‘ The funny thing is, most people around you will say, ‘That’s such a fantastic idea!’ They’re probably thinking about it but didn’t want to bring it up,” Alderete said.

If you’ve already accumulated holiday debt, experts recommend prioritizing high-interest debt first. Credit card fees are at record levels. So the longer the debt exists, the more you will pay in the long run.

Finally, don’t hesitate to ask for help. Many nonprofit organizations like MMI offer free or low-cost help to get you back on track.

“You can call today and get started on a debt management plan and then be on your way when the holidays come. And that doesn’t mean it affects the rest of your budget. It could have a positive impact on the rest of your budget. That’s why it’s never too early to start,” Alderete said.