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7 steps to a debt free vacation



Getting through the holidays without getting into debt can be tough. During the holiday season 2020, consumers received an average of $ 1,381 in debt, according to a survey by MagnifyMoney, a 6-year high in the middle of the pandemic. However, a majority of respondents said they did not enter the holiday period and expected to have to rely on credit to cover their costs.

As the 2021 holiday approaches rapidly, the question is whether many will find themselves using credit again. to get through the spending season. The good news is that consumers can avoid indebtedness by taking steps now to build up cash reserves and keep holiday costs under control.

1
. Do it yourself to reduce costs

To set aside money for the holidays, start by identifying unnecessary costs that you can eliminate now. In addition to the usual goals – meals, happy hour every week or gym membership you do not use – look for the not so obvious unnecessary expenses you can reduce.

"You may think you are living lean, but you are probably paying someone for something you can do yourself, "says Trae Bodge, a shopping expert at TrueTrae.com." Car wash? House cleaning? Manicure? Skip a service or two for a couple of months, and you'll save enough for at least a few gifts. ”

2. Save your change, literally

Do you remember when you were young and diligently placed change in a piggy bank to save enough for the toy you wanted? Do not dismiss this old school savings tactic now that you are an adult because it still works.

"Put a big jar on the door and let everyone in the family drop the money every day," Bodge explains. "In no time you will have built up a small Christmas gift fund for yourself."

3. Set up automatic transfers for savings

To make it easy to save for the holidays, set up automatic transfers from your bank account to a savings account. "Start transferring small amounts of money daily or weekly that you will not miss – for example, $ 5 or $ 20, depending on your budget," says budget expert Andrea Woroch.

And for each unnecessary expense you reduce, include the amount of that expense in your automatic transfer to savings. "This will help you build up enough cash to cover these December holiday purchases, or at least give you the necessary budget increase," explains Woroch.

4. Help Your Savings Grow Faster

Choosing the right savings account can help your vacation savings grow faster. "This means, do not let it sit in a traditional bank," says Woroch. Instead, choose a high-yield savings account. For example, the average savings account offers an annual percentage rate of 0.10%. You can find some high-yield savings accounts with interest rates of more than 2%, according to Bankrate.com.

5. Money in the mess

You do not just have to cut costs to create holiday savings. You can also generate extra money to set aside. One of the easiest ways to do this is to go through your home to find things you no longer use and can sell. "This is a particularly good idea for your child's playroom because you're likely to get a lot of new toys from family members," says Woroch.

To sell your unwanted items, take advantage of an auction site like eBay. To price them right, look for similar items that were recently sold online, Woroch says. "You also want to time sales right," she states. "Schedule going live when more people are likely to shop. Think about work – 5pm. Until 8pm." Or you can use a website like decluttr.com to sell books, CDs, DVDs, games, mobile phones, technical items and even LEGO without the need for an auction.

If you want to sell large items are you better off selling them locally via Craigslist, OfferUp or the Facebook market, says Woroch. Stay safe by meeting potential buyers in a public place during the day.

6. Consider a Side Life

A side life is a great way to make extra money on vacation, says Woroch. Many retailers employ seasonal workers. In addition, you can probably get a staff discount with a retail job, which can help you save money on gifts. . "For example, you can earn up to $ 1,000 extra a month just by watching someone's pet in your own home when it suits you through sites like Rover.com," says Woroch. You can use a page, such as Sidehusl, to find gigs that suit your schedule and skills.

7. Discussing gift expectations with family and friends

One of the biggest benefits of getting started with your vacation planning is that you have time to talk to friends and family about gift expectations. You can suggest that you draw names instead of exchanging gifts with all family members and friends, says Woroch. Or you can suggest that the adults in your family only buy gifts for the children instead of everyone.

By agreeing to reduce the number of gifts you give, you can help yourself and your friends and family to spend less and avoid to go into debt this holiday season.

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About Cameron Huddleston

Cameron Huddleston is the author of Mom and Dad, We Need to Talk: How to Have Important Conversations with Your Parents About Their Parents. She is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplingers Personal Finance, Business Insider, Chicago Tribune, Forbes, MSN, Yahoo and many more print and online publications.

U.S. News & World Report named Cameron one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named me one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, MSNBC, CNN and "Fox & Friends" and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR and more than 30 podcasts. Cameron has also been interviewed and quoted as an expert in The New York Times, Chicago Tribune, BBC.com, MarketWatch and more.

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