For many Americans, the time period between Thanksgiving and the end of the year means a lot of shopping, standing in line and spending. Unfortunately, the average household tends to overspend at the holidays, putting themselves in debt with credit cards and bank loans just to make ends meet during this crazy time of year.
While the holidays are nearly upon us, it isn’t too late to make some plans now that will help you to avoid getting yourself into too much debt and start planning for a worry-free holiday season next year. It’s time to start being smarter and stop working harder to pay for all the things you want to do during the holidays. From gifts for friends and family, holiday dinners, trimming the tree and special nights out to share the joy of the season with loved ones, these tips can help you be able to afford it all.
Tip #1 – Be a List-Maker
Santa knows what he’s doing by making a complete list of all the things that need to be done during the holiday season. Before you write down a single thing, know how much money you have on-hand to spend. Don’t just go buy a few things and think you’ll figure out how to pay for them later, know ahead of time what your budget is so you can divide your money effectively among gifts and other holiday expenditures.
Some of the lists you will want to make and keep this time of year include:
- gifts for family and friends
- exchange gifts for the office, school, clubs, church and other activities
- travel expenses
- wrapping supplies – paper, tape, bows, ribbons, tags and bags
- decorations for your home and any parties you might be throwing
- holiday food and cookie baking supplies
Tip #2 – Use Cash Whenever Possible
When you make your lists, withdraw the money from your credit union savings account and keep it in a marked envelope. This will help prevent you from splurging and over-spending or deviating from your lists. Paying in cash also helps you to realize just how much a $100 gift item is when you have to count out five $20 bills and hand them over to the cashier.
Setting aside cash to pay for all of your must-have expenses will also ensure that you don’t run short at the end of the month between the holidays and your next payday. This will reduce the amount of charges you put on your credit cards for last minute or emergency purchases throughout the month of December.
Tip #3 – If You Must Use a Credit Card…
The rule of thumb is that if you absolutely must use a credit card to help pay for all the things you need to do this holiday season, don’t charge more than you can pay off in a single month. That means that everything you put on your credit cards should be paid off completely by the end of January – no exceptions.
This will prevent you from getting into the never-ending loop of paying for your holiday shopping throughout the year only to finally have a zero balance a few weeks before it’s time to go shopping again. Break the cycle. Set goals and limits for yourself and you will reduce the amount of debt you incur this holiday season.
Tip #4 – Shop Online Only If You Save Money
It can be easy to just click, click, click and accidentally overspend on gifts you purchase online with credit cards if you aren’t careful. Again, set goals and a budget for each gift you buy and if you do it online, don’t forget to include shipping in the cost. Even better, shop at websites that offer free shipping and save even more!
Only make purchases online if you are saving a considerable amount. When you do save, don’t pressure yourself to still spend X-amount of money on each person on your list. If the gift exchange says to spend $20 but you find a $20 gift for $10, don’t go out and buy something else. Stash the savings and put it away for unexpected expenses that might come up.
Tip #5 – Start Planning for Next Year
As you go about your business of shopping for gifts and spending on other holiday events, hang on to your receipts and make notes about your spending. This will help you to save for the holidays next year by making you aware of how much money you do spend so you can start putting money away in your credit union savings account.
Even better, consider opening up a Christmas Club account at your local credit union. You can open a new account in January with just one dollar. Your credit union will give you a passbook to keep track of your savings and the balance is automatically transferred to your Main Share credit union savings account during the first week of October. That gives you 9 months of saving and a one-month jump on your holiday shopping to get the best deals possible.
Tip #6 – Contact St. Anne Credit Union for More Savings Ideas
St. Anne Credit Union can help you boost your ability to save for the holidays through a variety of savings accounts and tools available to members. Located in New Bedford, Massachusetts and serving credit union members from Plymouth and Bristol counties, St. Anne Credit Union offers an annual Christmas Club savings account, Main Share credit union savings account, money market account and other savings opportunities.
Call St. Anne Credit Union or stop by our New Bedford location for more information about innovative ways to save for the holidays and reduce credit card debt. A stress free holiday shopping season is the best gift you could ever give yourself. Starting off the New Year with no added credit card debt is even better!