The secret to a debt-free holiday

With so many holiday sales, it’s easy to get wrapped up in the moment and lose track of your spending. So, the key is to know your numbers and stick to a spending plan. This means allocating a certain amount of money for all of your holiday purchases. Know how much you have to work with and don’t go beyond that number.

Then, before you hit the stores, go holiday shopping equipped with a checklist (use your blackberry or I phone to quickly type in your notes if you don't have time to write down a list) Keep the list to items you need and the people you need to purchase gifts for – this will help you stay on track and avoid getting into debt.

Don't make the mistake we did and turn to debit as a way to stay debt-free this holiday season. Using debit doesn’t make your money work harder for you. Our ideal way to pay is with a Charge Card, because you really do get more than just a receipt:

• You get Membership Rewards points for all of your spending, which you can turn around and use for gift-giving, traveling for the holidays, you name it…
• All your holiday purchases are protected.
• You’re getting all of that and building and protecting your credit history at the same time.

With debit, you may not be offered any extra protections or you may need to pay additional fees for safeguards such as extended warranties. We are big fans of the American Express Charge Cards because its like carrying a security blanket in your wallet – return protection during the holidays is essential and if the store won’t take an item back, American Express will (up to $300/item; max of $1,000 annually).

Your plan holiday spending plan

As Smart Cookies, we create monthly spending plans and the same steps can also be applied to the holidays as well.

Think outside the “gift” box when creating a holiday spending plan. Include everything and anything related to holiday expenditures – from the postage, gift wrap, holiday dinners, hostess gifts for holiday parties, and of course, travel.

During the holidays, it’s easy to go beyond your spending plan. So, to make sure we don’t overspend, we pay for all of our holiday purchases with the American Express Charge Card. Paying with Charge is like “plastic willpower” – it helps us spend within our means because we have to pay in full at the end of the month.

One idea is what we like to call “Card Shark” – Save on card costs while saving the planet by recycling your old Christmas cards. Try cutting and glue the fronts of the cards onto blank note cards, or use the back side of an old card front as gift tags.

Another idea is “Wrapping Rapture” – Save on gift wrapping by using packing paper instead of expensive wrapping paper – large rolls can be purchased for as little as $2 and used throughout the year. The earth toned paper can be dressed up with festive bows or natural elements like a sprig of holly.

This holiday season, people are looking for ways to cut back on spending, but still need and want to purchase gifts for friends and families. According to a recent survey from American Express, consumers are eyeing popular items like gift cards (58%) and electronics (37%) while bringing a sharp eye for bargains. Instead of using cash for these items, American Express Charge Cardmembers can use sweet Membership Rewards points– saving you money, while still getting you the things you want.

In fact, this year, Amex has done some personal shopping for you by identifying some of the most sought after items this holiday season and offering these “Holiday Hot Picks,” for points instead of cash. This year’s “Hot Picks” include:

• The Beatles: Rock Band (11,500 points)
• Flip Ultra 120-Minute Digital (23,6000 points)
• Samsung 12.2 Touch-Screen Digital Camera with Dual LCD (46,600 points)
• HP Mini 2140 Notebook PC (97,000 points)

Happy gift giving!!

Lastly, ‘tis the Season for Giving. If you're looking for a way to give back to those less fortunate this holiday season, but can't afford it, volunteer your time at a food bank or donate clothes you’ve found while cleaning the house in preparation for the holidays to your local charity. Your holiday-inspired generosity may pay you back in the form of a tax deduction for your donations.

To keep your spending really on track this season, give your self the gift of control and create your holiday spending plan by signing up to be a Smart Cookie Premium Member today!