The holidays typically bring a flurry of social occasions, gift giving, food, and more food. These festivities also bring considerable expenses and consumers quickly find themselves getting deeper into debt this time of year. With a little planning and a few guidelines, it's possible to enjoy the season without falling into a debt trap. These tips should help get you started.
Create a Budget
A little pre-planning goes a long way. Start early by taking stock of your finances so you can determine how much you can realistically spend over the holidays. List your income and all your expenses for the month so you know what’s available to spend during the holidays. You can do this on paper using this handy money management planner or using your 1st United Money Manager, available by logging in to your account. Or check with your local bank or credit union to see what tools they have available to you.
Never Leave Home Without a List
A list can be a person’s best friend this time of year. It reminds you of what you agreed to for your holiday spending and holds you accountable to your planning. When you are shopping for gifts, have a list of who you need to purchase for, what you would like to buy them, and how much you want to spend – and stick to it. When shopping for groceries use the same approach – set a budget and make a list.
As you shop, keep every receipt in your wallet or an envelope so they are in one place. This will help you to maintain a record of how much you spent and what you bought. Compare this list to your plan to see if you are sticking to your agreement with yourself. If not, adjust so your debt does not get out of hand.
There is so much information online nowadays that it’s much easier to comparison shop. Sign up for email alerts from your favorite stores and watch for announcements about special door-buster sales or discount days. Doing your homework, particularly for big-ticket items, could pay off in the long-run.
Stay Ahead of Credit Card Debt
Comparison shopping isn’t just for your gift list. Responsible spending starts with comparing credit cards for the lowest rate. After that, a responsible spender lives within their means and only charges what they can pay off in a reasonable amount of time (we recommend a three month pay off period as your guide).
In the end, the holidays are about enjoying friends and family. Focusing on time with loved ones rather than gifts could help reduce stress and keep your spending in check. If you must spend, spend wisely. But if you can find ways to enjoy your holidays without excessive spending, you may be happier in the long run. Either way, we wish you a happy holiday and encourage you to reach out to 1st United if you ever have questions about holiday budgeting.