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The 12 days of credit: Budgeting

By Janna Herron · Bankrate.com
Monday, December 9, 2013
Posted: 4 pm ET

In the spirit of the holiday season, Bankrate's credit card blog is giving you the gift of credit card tips! We will be posting one tip a day over the next 12 business days to make sure you and your wallet are merry and bright once your Christmas list is completed. Happy shopping!

Hey you, put the credit card down a second, listen to the Christmas music and take stock of your holiday shopping before it gets out of control.

Here's the first big question to ask yourself: Are you still on budget?

Avoiding living like this sign.

Avoiding living like this sign.
Photo credit: Jim Robinson

Almost three-quarters of Americans planned to have a budget before the holidays, but only half expected to stay within it, according to a recent survey from Capital One. In fact, U.S. consumers on average end up charging 40 percent more on their credit cards in December than they do in an average month, according to recent TransUnion data. One in five spends twice as much.

Not only can that swollen outstanding debt become a stranglehold on your personal finances come January as you try to pay it off, it also can take a toll on your credit score because you increased your utilization rate, or the percentage of available credit you use.

Don't become a statistic.

Instead, take a minute now to jot down whom on your list you've marked off and how much money you actually spent on that person. Now, how much do you have left in your budget? Divide that amount with the remaining people on the list and keep that budget with you as a reminder when you head for the mall. And don't feel pressured to spend every last penny if you don't have to.

"I think it's totally possible to stick to a budget. And I think it's possible to come in under budget," says Shane Holdaway, managing vice president at Capital One. "The important thing is to remember that the holidays are about being with people you care about, not the gifts."

How does your budget look? How do you keep from overspending? I want to hear your tips!

Follow me on Twitter: @JannaHerron

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