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Consumer Watch: How to break the holiday overspending cycle

Consumer Watch: How to break the holiday overspending cycle

If you spent like the average American over the last couple of months, you were out nearly one thousand dollars to buy the people in your life gifts. Now is the time to right the ship when it comes to finances.

Pulling out the plastic to pay for all of those holiday purchases does take its toll. It is easy to get into a holiday spending spiral, but as those bills start to stack up, it's time to get real about your finances.

“A big piece of advice that i have for people is to stop reaching for that credit card. it is so easy to just swipe it and accumulate a big statement bill at the end of the month, but to counteract this i would recommend reaching for their debit card instead,” says Kelly Anne Smith, Savings Expert at The Penny Hoarder.

If you are bad at regularly checking your bank account, or you don't feel more accountability using your debit card, the next step to stop the spending is to only use cash.

“It is a tangible item that they are giving away each time they purchase something, and that way they can see exactly how much they have left after every purchase,” says Smith.

If you have paid off your debts, but you are still spending more, and saving less, a good way to break the habit is to make savings a little more fun.

“You can get family and friends involved, and a little healthy competition will keep you motivated.” says Smith.

A small prize can help the fun factor, like everyone can pitch in for a gift card, and the winner gets the prize plus gloating rights for the year.

Financial experts say you should be able to pay off your credit cards in full every month. If that is not possible, look at your budget and figure out how quickly you can realistically make that pay off. Paying only the minimum is a money waster.

Saving a small percentage of your paycheck starting now will mean you do not have to place the next year's holiday gifts on a credit card.

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