The holiday season is an exciting and inspiring time of the year that promotes giving to those we love and those who may be less fortunate. However, if your heart is bigger than your wallet, a season of joy and giving can easily turn into a new year of debt and regret. We all enjoy the feeling of pride as our loved ones open their gifts, but spending within your means is the best gift you can give yourself. Developing a realistic budget and maintaining a shopping list will allow you to spread joy sensibly, and reduce some of the stress associated with holiday season.
Steering clear of these bad spending habits will help you begin the
new year without a financial hangover:
Forgetting to plan ahead. Before you start shopping, develop a realistic budget. Determine how much you are able to comfortably spend on others while taking into account your normal monthly expenses do not take the holidays off.
Winging it. Make a list and check it twice. Keep your gift list limited to family and close friends, noting how much you want to spend on each.
Losing track of other costs. Stuffing the stockings can quickly drain your pockets. Don’t forget costs beyond gifts, like postage, gift wrap, decorations, greeting cards, food, travel and charitable contributions.
Waiting until the last minute to shop. Avoid shopping while rushed or under pressure, which can lead to overspending. Having a list and starting early allows you to comparison shop online first or download an app that lets you compare prices before you buy anything in a store. Before you head to the cashier (or online checkout), make sure your purchase is within the budget you set.
Shopping Impulsively. Fancy holiday displays or a spectacular sale on something you’ve been wanting can easily throw you off course. Stay strong and stick to your list to stay within your budget. Don’t try to compensate for overspending by applying for store credit cards you don’t need just to get a one-time discount. Doing so only compounds the problem.
Using credit recklessly. Credit cards can be useful tools when used properly. However, during the holidays it can be easy to overspend since the money is not coming out of your purse or bank account as you spend it. If you must use credit, use only one card—preferably the one with the lowest interest rate—and leave the rest at home. Pick a date when you can pay off your holiday credit card bills, and commit to paying off the balance by that time. Be sure to check statements for unauthorized charges and report them immediately.
Throwing away your receipts. With all the stress and excitement of the holidays, it can be easy to forget what you purchased. Keeping your receipts will allow you to return items you may have accidentally purchased twice, or found cheaper at another store. You should also compare your receipts with your credit card statement to ensure everything was wrung up properly and there are no fraudulent charges on your account.
Thinking you have 12 months until next Christmas. The holidays can’t ‘sneak up’ on you since they happen the same time each year. Don’t wait until next November to begin your holiday planning. North Shore Trust offers Christmas club accounts, allowing you to feel the holiday cheer throughout the year as you set money aside for next Christmas.