One of the most pressing issues that shopping consumers face is the burden of the previous holiday season’s debt. Below are four strategies for avoiding the trap of holiday season debt.

Understanding financial baselines

In order to avoid overspending money, consumers need to create a financial baseline. This means that consumers will need to perform an accounting on their current financial health.

They should start by taking inventory of all of their liquid assets. They should take accounting of their bank accounts, their on-hand funds, and their savings accounts. Then it’s important for them to set a spending boundary for the season. Once they’ve established how much money they honestly have on hand for holiday spending, then they need to declare an amount to spend that must not be violated.

Categorize and budget holiday spending

After the consumer has created a financial spending baseline, then it’s time for them to create specific budgets for holiday spending. Most make the mistake of placing all of their spendings inside of a general pool, but it’s far more effective to create multiple budgets for the variety of purchases that will be made.

For example, a budget can be created for large-ticket items. Another budget can be created for gifts to associates and business colleagues (for example). Another budget can be created for children or extended family members. The more that holiday shoppers designate their spending, the better of a job they’ll do with avoiding holiday season debt.

Be aggressive about paying down credit cards

One of the greatest financial traps that consumers face after diving deep into holiday spending is the trap of maxing out their credit cards. In fact, it’s estimated that most consumers are still carrying the previous year’s holiday debt, even as they use their over-burdened credit cards for the current holiday season.

Consumers need to become aggressive about slashing their credit card debt, as early in the new year as possible. They can create a repayment budget that allows them to wipe the slate clean well before the new year’s holiday spending tasks.

Create a holiday fund for next Christmas season

Finally, consumers will find that they’ll come out further ahead of overcoming their holiday debt if they create a holiday spending fund at the top of the year. This way, holiday spending won’t sneak up on them. They’ll be far less prone to anxiety-induced spending that leads to a financial sinkhole.