5 Steps to Avoid A Holiday Debt Hangover
We’ve got a 21st century approach to keep your Christmas spending in line this year.
Christmas may be a merry time, but it is also a stressful time. A lot of the stress comes from the impact of the Christmas season on your pocketbook. Because it is traditionally a season of giving, retailers pull out all their tricks to get you to spend, spend, and spend.
There is nothing wrong with getting into the Christmas spirit of giving. Who doesn’t enjoy the smile of a child unwrapping gifts on Christmas morning?
However, for your ongoing financial health, it’s best if you don’t let Christmas put you into debt.
According to ValuePenguin, nearly half of us will go into credit card debt during Christmas to the tune of nearly $500 — and maybe much more. This means long after the Christmas tree is taken down, your Christmas debt will be hanging around far into the new year.
Recognizing this happens year after year, many of us vow: “This year will be different.” That is a good intention, but that’s like making a vow to swear off Christmas fudge. Good luck with that. Discipline is overrated.
Those who have succeeded with money will tell you that discipline and knowledge actually play a minor role. To win with money you need good habits, positive behaviors, and skills that you can apply.
Holiday Budgeting Strategies
So, is it really possible to keep Christmas spending in line if that is your goal?
It is. Here is how.
The key is to find a way to limit your spending in a way that is convenient and flexible. In previous generations people could limit their Christmas spending by going to the bank and taking out their Christmas funds in cash. Once it was spent, they were done with Christmas purchases. However, nowadays some of the best values for purchases are online and for that, cash doesn’t work.
Here is the 21st century answer to keeping Christmas spending in line: It’s called OnCard and it is available to anyone with a Zions Bank checking account.
OnCard is a prepaid debit card that can be reloaded at any time, and it comes with a built-in money management app. Here is how you can use it to pay for Christmas.
Holiday Budgeting Step #1: Order your OnCard
It will take a few days to arrive at your home. You can add a secondary cardholder and up to five additional cardholders with whom to share money while maintaining visibility and controls. You can view activity for all cardholders and lock and unlock all cards as needed.
Holiday Budgeting Step #2: Decide how much you are going to spend on Christmas
Aside from gifts, you need to budget for food, parties, decorations, and travel. Include a cushion because extra stuff is bound to come up.
Holiday Budgeting Step #3: Check your bank balances
Once you have determined your Christmas spending limit, check your bank balances to make sure you have that much on hand. If you fall short, make a plan to save any additional funds needed before the holidays hit.
Holiday Budgeting Step #4: Load your Christmas funds onto your OnCard
Your OnCard can be used anywhere that Visa is accepted, including online shopping. If you ordered a companion card, each OnCard holder can spend from the same balance. You can’t do that with most prepaid debit cards.
You can check your OnCard balance anytime using the OnCard app. Refuel funds anytime by transferring dollars from your bank account, adding cash at a branch location, direct depositing funds, or moving money from a third-party bank. OnCard will send you notifications when you are getting close to reaching the budget you have allocated for Christmas, which makes it easier to monitor your spending.
Holiday Budgeting Step #5: Set your Christmas budget within the OnCard app
You can create categories for all of your holiday spending, including gifts, food, parties, decorations and travel. As a reloadable, prepaid debit card, only the amount of money you load onto the card is available to access, so you can set parameters around your own spending.
This year, give yourself the best Christmas gift of all: No debt hangover in January!
And OnCard is the gift that keeps on giving, because it can be used year-round. Some people use it to budget their monthly expenses like gas and grocery shopping, while others like to use it to allocate funds for impulse purchases. Because the money is separate from your checking account, you only spend what is available, which can help keep you from overspending.
The majority of Americans find that finances are the most stressful thing about Christmas. Once you switch to OnCard, the most stressful thing you’ll have to deal with is what to do with the fruitcake you got as a gift.
Don Milne is Financial Literacy manager for Zions Bank.