one dollar bills in US currency with scrabble tiles spelling SAVE placed on top
Saving a little each month can help avoid credit card interest fees for holiday spending.

By Angelica B. Davis, Family and Consumer Sciences Agent, UGA Extension Bartow County

Shorter days and cooler temperatures remind us that holidays are just around the corner. Americans spend an overwhelming amount of money on gifts every year. It is great to shop and find that perfect gift for someone important in your life, but holiday spending habits can be counterproductive. Magnify Money reports that Americans accumulated more than $1,000 in holiday debt at the end of last year. Spending more than normal during the holidays and putting most of the extra on credit cards can mean months or even years of debt payments.

Credit cards are convenient, especially when you pay the balance in full every month. They help to build credit and can have a variety of benefits through reward programs. However, if you do not pay off the balance every month, finance charges increase the cost of the holidays. Credit card interest rates are high. So how can consumers stay out of this yearly rut?

To avoid paying off credit card bills for months after the holiday season, start saving now. It is best to start saving something every month. The more you can save, the better, but saving even a small amount makes a difference.

To get started, analyze your weekly spending. See what you can do to cut unnecessary expenses. Small changes can free up extra money for your savings fund. Reducing your spending by a dollar a day gives you an extra $30 a month. Skip the $5 cup of coffee every morning or pack a lunch instead of eating out to save even more.

Most financial institutions allow you to electronically transfer money from your checking into your savings account. Automatic transfer is convenient, and you can set it up so that you never have to think about saving. Set the date of the transfer on your payday, and the money goes into savings before you’re tempted to spend it.

After several months, your holiday fund will start to add up. When the holidays roll around again, use your savings instead of your credit card for gifts. Avoiding the yearly cycle of credit card debt and hefty interest payments will free up more money for you to save. Make this the year you streamline your savings and beat the holiday debt cycle.