The holiday season is a time for spending quality time with your loved ones and friends and having fun. But it’s also a time when it’s all too easy to succumb to the lure of special offers and desire to spend more than you can afford on gifts and entertaining. This behavior often manifests in a lingering debt situation that can take months to recover from.
To understand the scope of this potential problem, consider these statistics:
If you’re looking for holiday spending tips, search no further. In this article, we’ll explore six easy ways to make sure you get to enjoy all the holiday season has to offer without becoming buried in unwanted debt.
The best place to start is by getting a clear understanding of the expenses you’re expecting to incur over the holidays – before you hit the shops or start browsing online stores.
First, start with your gift list: write down each recipient’s name, what you plan to buy for them, and how much you expect it to cost. Review your list critically – are there some people on it that you could get away with just sending a card to or simply calling up instead? Another good way to reduce the number of gifts you need to purchase is to suggest to your family and friends that you organize a “Secret Santa” gift exchange this year.
Also, don’t forget to include other holiday expenses such as gift wrap, greeting cards, postage, decorations, food and drink, and gas (if you’re traveling).
Once you’ve got a clear picture of the amount you’ll need to spend, create a detailed budget of all your expenses and categories of expenditure. Then, assign yourself spending limits for each category.
Wherever possible, start looking for and purchasing gifts and groceries early.
This will allow you to take advantage of special offers and discounts. The more lead time you give yourself to buy goods, the more time you’ll have to compare prices. Further, it will avoid you running out of time and making panicked, last-minute purchases and possibly paying more than you intended to.
Remember that if you’re shopping online, making early bulk purchases will likely result in lower shipping costs.
If you own multiple credit cards, it’s a good idea to limit the number you use for holiday shopping to just one or two. Also, be sure to use the ones with the most favorable interest rates to minimize your debt burden.
Credit cards that come with rewards can be useful in helping you reduce your overall holiday expenditure. For example, if you purchase holiday gifts or goods with cards that have cash-back options, you’ll effectively be paid back for a portion of everything you spend.
Some people put their holiday budgets into their credit cards upfront – using their credit card as a debit card and avoiding going into the red altogether.
Make a point to save all receipts from the purchases you make over the holidays and tally them up daily or weekly. This way, you’ll be able to track how well you’re sticking to your budget and see at a glance how much money you have left to spend.
A simple spreadsheet is a helpful way to manage this task.
Just as important is carefully checking all your credit card statements, line by line. Look out for any unauthorized charges, and be sure to report them to your credit card issuer or bank immediately.
If you have a hobby like painting, baking, sewing, or even gardening, why not put your creativity to work over the holiday season? Homemade gifts with a personal touch will always be appreciated.
Another inexpensive idea is to make a simple collage of family photographs or use a free online card service instead of buying and sending paper-based ones.
But, back to our previous point – make sure you capture all the expenses you incur in putting together your creations.
If possible, begin 2022 by putting a little money away every month for the next holiday season. One way of doing this is to set up a separate savings account to deposit a certain amount every month. Even an amount of just $50 will give you a holiday fund of $600 by this time next year.
By having cash on hand when the next holiday season comes around, you’ll avoid going into debt and racking up interest charges once again.
This approach will also allow you to make thoughtful gift purchases throughout the year and take advantage of special offers or discounts when they present themselves.
Earned Wage Access (EWA) is becoming an increasingly popular company benefit offered by employers. It provides a means for people to access wages they’ve accrued but not yet collected before their regular payday. Your funds can be loaded onto a debit or prepaid card, transferred to your bank account, or even picked up as cash at Walmart.
With Payactiv’s EWA service, you can even use your earned wages to pay for Uber rides or Amazon purchases directly via an app on your smartphone.
It’s a great way to avoid having to incur credit card debt or take out loans to fund your holiday expenses and other unforeseen or emergency expenses.
You can easily start saving and budgeting as well right in the Payactiv app. Both tools are free to use and can help to keep track of all your expenses and also set up goal-based savings. That way setting money aside will be something that just happens automatically with each paycheck and will give you the peace of mind you need and deserve during the holidays.
You can get started with Payactiv right away, even if your employer doesn’t offer it. Join Payactiv and create an account today!
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