6 tips to avoid bad debt this Christmas

As we enter the holiday season, we get ready to celebrate with our family and friends, but unfortunately for many people, it’s also a time of heightened financial stress and anxiety. At Fix My Credit, we understand the worries this time of year can bring and we know how crucial it is to find a balance between creating memorable moments and managing your finances wisely. 

To help you through this holiday season, here are 6 tips to avoid bad debt and enjoy the festive time stress-free: 

Create a budget and stick to it

Before you hit the shops, take a moment to create a realistic budget to ensure you don’t spend money you don’t have. You’ll need to consider your income, existing expenses and what you can comfortably afford to spend during the holiday season. Once you have created a budget the most important thing is to stick to it!

Determine your needs vs wants

It’s easy to get caught up in holiday spending, so it’s essential to differentiate between your needs and your wants. We all want to give our families everything during the holidays, but it’s important to know what is essential and what isn’t. This will help ensure you have everything you need and don’t spend money on unnecessary items that may cause financial stress.

Consider DIY gifts

Sometimes homemade gifts are more meaningful than those that are store-bought – and they’ll also save you money. DIY treats or craft projects can carry a unique personal touch that resonates far beyond the price tag. 

Whether it’s a batch of homemade cookies, a handcrafted ornament, or a personalised photo album, the effort and thought put into a DIY gift often makes it more cherished. Plus, you can express your creativity and give a thoughtful gift without breaking the bank. 

Keep your credit cards in your wallet and avoid Buy Now, Pay Later options

At this time of year using your credit card can be tempting, but it also paves the way for impulse spending and bad debt. We know it’s easy to get caught up in the holiday spirit and hope to deal with the financial aftermath later, but keeping your credit cards in your wallet will help you stay within budget and avoid post-holiday bad debt. 

Read about the 6 mistakes people make using credit cards.

Buy Now, Pay Later options like AfterPay and ZipPay may also be appealing, but also come with their own consequences which can leave you with bad debt. Paying with cash or debit cards is the better option and will help you avoid the financial hangover in the new year. 

Spend less on presents with Secret Santa

When it comes to buying presents for your family and friends, it can become quite expensive, especially if you have a large family or extended friends group. A present exchange like Secret Santa reduces the amount of gifts you need to buy and the money you have to spend. It adds an element of fun to gift-giving and helps you to avoid bad debt caused by overspending. 

Shop for discounts

Just because something is on sale doesn’t mean it has any less value. Christmas shopping doesn’t have to be expensive. Take advantage of the sales, discounts and promotions to find the best deal on the items you want to buy. It pays to shop around and compare prices in-store and online. 

Fix My Credit is here to help

Try making a budget and sticking to it, consider DIY gifts, keep your credit cards in your wallet, avoid Buy Now Pay Later, and use cash to prevent debt in the new year. Give Secret Santa a go to save money on gifts, and shop for discounts for smarter spending this holiday season.

We hope these tips make your holidays stress-free and Fix My Credit wish all our clients a happy holiday season and a prosperous 2024 with fewer money worries.