8 Tips to Smart Holiday Shopping and Not Going Into Debt

It is holiday shopping season. Consumers are expected to spend almost $1,048 on average per person this year, according to the National Retail Federation, up 4% from last year. How can you be a smart shopper and avoid breaking the bank?

Steve Siebold is author of the book “How Money Works,” and a self-made millionaire who has interviewed more than 1,300 of the world’s wealthiest people over the last 35 years.

His advice:

• Leave your emotions on the shelf: It’s easy to get wrapped up in the spirit of the season, but when it comes to buying gifts this year, leave your emotions on the shelf and let reason be your guide. This is when you must start using logical thinking in the decision-making process. While your spouse might really like that $1,000 necklace, is that really the smartest move if you don’t have the money?

• Plan ahead: Make a list and check it twice. Before you head to the store, make a list of each person you need to buy for, and allocate a certain amount of money for each of them. Don’t overspend by even a dollar. This is important because if you start overspending by five dollars here and 10 dollars there, it adds up quickly and you can easily go into debt.

• Be honest: The last thing your friends and family want is to see you go into debt, or further into debt. Remember, there’s no shame in telling people that this year will be a lean holiday season when it comes to exchanging gifts. People will appreciate your honesty and attention to your finances.

• Don’t get caught up in the moment: If your shopping cart is overflowing, step back, regroup and make sure you can really afford everything you plan to purchase. While there are some good deals to be had, don’t fall for marketing campaigns that make you feel as if you’re getting a great deal when you’re really not (i.e. buy it today – pay for it tomorrow). The key is to be mentally tough to know when enough is enough.

• Don’t pull out the plastic: Don’t even think of using a credit card unless you are 100% sure you can comfortably pay it off at the end of the month. The last thing anyone needs is to get hit with high interest rates and a blemish on their credit score. Ask yourself this critical thinking question: Would I rather have the short-term satisfaction of expensive material possessions, or the long-term results of financial freedom and abundance?

• Learn from the past: Did you overspend last holiday season or some other year in the past? Remember how it set you back financially? Remember how bad it felt when you opened up your credit card statement and realized you couldn’t pay it all? Revisit that pain and how miserable you felt before you start shopping this holiday season.

• Limit charitable giving: Yes, you read that right. Giving a little pocket change to support the homeless this holiday season is one thing. But until you’re financially comfortable yourself, you can’t give what you don’t have. While it’s certainly commendable that you want to help others, those who try and support every cause known to man but can’t afford to are doing more harm than good.

• Make it a teaching moment: Your kids are watching your every move, so play it smart and use the holidays as an opportunity to teach kids how money works. Even parents who have failed to reach their financial dreams can still teach their kids important lessons about money during the holiday season.