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Planning Ahead For Holiday Spending
Planning Ahead For Holiday Spending

Find A Happy Balance With Your Holiday Spending

 

The holidays are coming! The holidays are coming! Are you financially ready? Have a plan in place that allows spending within your means and a way to pay off any holiday debts?

 

As consumers, we’re pretty much prime targets for sophisticated year round marketing that culminates in the biggest spree of the year: the holidays. And boy do Americans spend! Deloitte expects retail holiday sales to top $1 trillion between the months of November and January this year. That’s a lot of spending. 

 

What’s really incredible is understanding that 56% of Americans will take on credit card debt as a result of holiday shopping. MagnifyMoney found consumers who took on debt last holiday season started 2017 with an average of $1,003 worth of new debt.

 

Exactly where and how does all of this money get spent? According to the National Retail Federation’s 2017 Holiday Season Survey, consumers are planning to spend an average $967 dollars this holiday season, $608 of which will be spent on gifts for others, $218 on candy, food and decorations, and $141 on non-gift items for themselves and their families. 

 

Here’s your wake up call - Wake up! Are you about to stumble into debt? You really do have time to make careful, self-respecting decisions about your holiday spending and you owe it to yourself to do so.

 

Check out these helpful guidelines and ideas to get started with your balanced financial holiday season and onto a clean financial start to the New Year.

 

  • Who to gift? Make a list

    • Divide the list into ‘musts’, ‘shoulds’ and ’would like to’s’

    • Spend money in order of importance

    • Give yourself permission to not have to gift to everyone

  • What else needs money? Make a list of expected non-gift holiday expenditures

    • Decorations, travel, meals, parties, entertainment, grooming, etc

    • Divide the list into ‘musts’, ‘shoulds’ and ’would like to’s

    • Spend money in order of importance

    • Give yourself permission to not have to do it all

  • How much can you spend? Create a budget

    • Ideally you’ve been planning for this all along and now it’s just a matter of deciding how and where to spend your funds

    • Allocate your available budget across your lists, working in order of importance

 

If you haven’t budgeted or saved or built a bigger than normal spending allowance into your plans, now what? Must you be a holiday scrooge and avoid all the merriment? The simple answer is no, you’re not locked into a season of doom and gloom but you do owe it to yourself to remember and respect your financial future. 

 

  • Re-visit and re-edit your gifting and non-gift lists

    • Who must absolutely receive a gift?

    • What absolutely must be purchased or done?

    • Identify creative, responsible and appropriate ways to cover these

    • Figure out how much this will cost

      • Can you pay this off in full on your January credit card payment?

      • If yes, and that’s a really confident yes, go ahead.

        • Start your holiday budget now for 2018 while the pain of not having enough spending money is fresh

      • If no, then you need to go back and rework your ‘musts’ till your budget can accommodate your needs.

      • Don’t cripple the start to your New Year with holiday debt

 

Credit card companies and retailers are well aware of the pressure and excitement around holiday spending and cash in on perceived needs. You can count on receiving blank checks from your credit card companies close to the holidays, offering extended no payment due deals or low to no interest. Retail stores push store credit cards heavily and frequently offer significant discounts on first purchases in hopes of enticing you to take out more credit. It’s hard not to fall for credit card enticements when excessive giving and consuming are at their peak. 

 

Are you sure you’re using the best credit card for your needs? Needs change, card costs and benefits change - always a good idea to review what’s available. I recommend www.guidetocreditcard.com  as a resource to finding the best credit card for your needs. 

 

Beware credit card traps! Make sure any ‘interest free’ offer is truly interest free and not deferred interest! Deferred interest can whack you with large interest charges if the total balance is not paid in full prior to the ‘free’ period ending. Avoid splurge purchases made feasible because of some credit card bargain or deal! Will it really be an enjoyable investment if you end up making minimum monthly payments for what feels like an endless amount of time?

 

Don’t let the holidays sink you into deep debt. Too many Americans make only the minimum monthly payment towards their credit card debt, a practice that can keep you in debt for decades. Take an honest look at your budget, plan ahead for the first few months following the holidays, and spend within your means. If you accrue debt, pay it off in full at the end of the month it was charged to avoid sky high interest rates. 

 

Enjoy a holiday season that doesn’t cause stress and illness once the New Year begins!

 

 

 

 

 

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