The holiday season is undoubtedly charming but shockingly, it’s nearly upon us again! This period inevitably brings along additional expenditures, be it gifts for loved ones, traveling, festive parties, or house adornments. Are you financially prepared for this fast-approaching festive season?
In a post-holiday debt survey by MagnifyMoney last year, Americans incurred over $1,000 in holiday debts on average. Disturbingly, 78% of the respondents confessed they couldn’t clear their credit card debts by January, while 15% could only afford minimum payments. Proper financial planning can help you manage these costs, so it’s ideal to start setting aside some money right away. Crafting a saving strategy now can alleviate stress come the holiday season.
Find below seven handy tips for effective financial prepping for the holidays:
1. CURATE A SHOPPING LIST
Begin by listing all the people you usually exchange gifts with, including your in-laws. If you can’t decide on specific gifts yet, allocate a spending limit for each person. It’s wise to factor in a bit extra for tax and shipping charges. Reevaluate your list and spending amounts if it overshoots your budget to accommodate travel plans and their related expenses for the holidays.
2. DEVELOP A BUDGET
Once you have your shopping list, draw up a holiday budget. Assess your expenditure from the previous year to understand your spending patterns better. Break down the costs into achievable, small goals for each individual or occasion. Determine a spending cap for gifts, decorations, food, travel, and every other holiday-related expenditure.
3. SET UP A HOLIDAY SAVINGS ACCOUNT
A dedicated holiday savings account can be an efficient way to manage your savings exclusively for holiday shopping. Regularly transfer a set amount to this account to achieve your target. Direct deposit and automated monthly transfers are two helpful saving strategies.
4. MAXIMIZE ON SALE OFFERS
Cyber Monday, Black Friday, and Amazon Prime sales provide plentiful opportunities for discounts and offers. However, remember that these discounts are beneficial only when purchasing needed items. Use apps like RetailMeNot, Honey, or Rakuten for cash-backs and automatic discounts while shopping online or in person.
5. BUY SOME GIFTS EARLY
Holiday pricing can be unpredictable, with some stores reducing their prices while others increasing them. You may save money by buying certain gifts earlier, considering not all items are necessarily cheaper towards year-end due to high demand.
6. REDUCE NON-ESSENTIAL EXPENDITURE
A worthwhile tip for holiday saving is to cut down on unnecessary spending. Cut costs by dining in, curb purchasing new outfits, and trim any other non-essentials. This strategy can help reduce monthly expenses, making holiday shopping smoother.
7. BE PRUDENT WITH CREDIT CARDS
While credit cards are convenient, they can lead to an unmanageable debt crisis post-holidays. It’s essential to spend within your limits, using your credit cards only if you can comfortably pay off the balances. Choose the card with the lowest interest rate and closely monitor your credit card expenses.
In conclusion, it’s time to start saving for the looming holiday season. Follow the outlined tips, and you’ll be well-prepared for the holidays, ensuring a financially stress-free festive season. Make the most of technological advancements by utilizing budgeting apps like Mint, which help keep an eye on your expenditures.
