Holiday Budgeting Tips
Even though a shiny new 55-inch smart TV or shiny new gadgets are calling your name this season, they provide short-term emotional gratification and can often set back down payments and tank credit scores. Here are five tips for getting through the holiday season unscathed:
1. Research before you buy
Make a list of loved ones, friends and business contacts that you are looking to buy gifts and cards for. Think of what each recipient would like for the holidays and brainstorm what you can afford to give them, that way you won't be distracted by a shiny (more expensive) display item while out shopping. Additionally, keeping an eye out for sales can help you reduce your spend on each individual and open up more cash for fun holiday activities.
2. Create a budget (and stick to it)
It's so tempting this time of year to spread as much holiday cheer as possible, but it can be at the expense of future financial goals. Figure out how much you can spend this holiday season (with room for emergency spending, savings, and extra hot coffees) and then portion the amount to each person you'd like to give a gift to. Setting a firm price on holiday gifts will let you save more for the new year!
3. Don't open store credit cards
Even though you'll be doing a lot of shopping at your favorite shops, store credit cards can often be damaging to your credit score and offer fewer benefits than major credit cards. The inquiry alone for opening up an account can affect your credit score.
4. Plan for the extras
Even if you have a detailed gift budget, make sure to plan for all the extra holiday activities. If your office is having a Secret Santa or you're throwing a holiday party, make sure to add that into your budget and plan around it accordingly. Unplanned expenses add up around the holidays and can make more stressful financial situations for the following year.
5. Great things come in small packages
As they say, it's the thought that counts. Instead of splurging on big-ticket items, think about smaller, more meaningful gifts. Get back to what the season is all about: connecting with your loved ones. It's easy to get swept up into the retail frenzy, but it's not worth jeopardizing your financial stability or long-term goals.