Suze Orman Says to Ask Yourself These 3 Questions Before Making a Holiday Purchase

It's advice worth taking as you hit the stores.

The holidays are right around the corner, and that means that in the coming weeks, a lot of people might stretch their budgets and rack up scores of credit card debt in an effort to celebrate. Now to be clear, many people who end up with holiday debt do so because they're trying to please others and make them happy. And it's commendable to want to do that.

But racking up holiday debt really is bad news. For one thing, if you carry a credit card balance forward, it can cost you a lot of money in interest. That's money you might need for another purpose, like paying bills or growing your savings.

Also, too much credit card debt can lead to credit score damage. And if your score takes a hit, that could make it difficult to qualify for a loan (or at least an affordable one) the next time you need to borrow money.

Of course, at a time when there's so much pressure to spend, and when you might genuinely want to spend extra on the people you love, it can be difficult to determine which purchases are worthy of your money or not. And to that end, financial expert Suze Orman has some advice. She suggests following this three-question test to see if a given holiday purchase should be a yes or a no.

The three questions to ask before making a purchase

Orman insists that if you run through these questions prior to making a holiday purchase, you can avoid debt and the regret that comes with it:

1. Is it kind?
2. Is it necessary?
3. Is it true?

Now at first, these questions might seem overly philosophical. But here's what Orman means.

When she talks about asking if a given purchase is kind, she doesn't mean "Is it a kind thing to do for someone else?" She means, "Is it a kind thing to do to yourself?"

Buying a family member a $60 sweater they've been wanting is a kind thing to do for that person. But if it adds $60 to your own credit card debt, it's not a kind thing to do to yourself.

Next, Orman insists that any gift that forces you to go over budget isn't necessary. And so even if you're looking at a $15 item for your favorite cousin, if that's $15 you'll be adding to a credit card balance, it should be a no.

Finally, any holiday purchase you make should allow you to be true to your financial values and priorities. So, let's say you can technically afford to buy your child a $90 sweatshirt, but you don't believe in spending that much money on a single article of clothing. In that case, Orman says you should skip it and find a gift you can feel better about giving.

Advice worth taking

Although Suze Orman is financially secure right now, there was a time in her life when that wasn't the case. Because of that, she's really invested in helping people attain financial stability and avoid debt. And so when she gives out advice like this, she isn't doing it to ruin the holidays for anyone. Rather, she's doing it to help people avoid making big financial mistakes. And so it's worth taking her advice to heart -- and doing your best to close out the holidays debt-free.