Avoid Debt During the Holidays
It is all too easy to fall into debt because of holiday spending. Once the credit card bills start rolling in after the holidays, your spontaneous generosity turns to shock, and you spend months trying to pay off the holiday debt. Even if you planned ahead, relegating future paychecks to pay off your credit cards, unexpected expenses might derail those plans. And the next thing you know, the holiday shopping season rolls around again, and the vicious cycle renews.
With some careful planning, you can avoid overextending your finances during the holiday.
Save for the Holidays
If your bank or credit union offers holiday savings accounts, open one. All through the year you could be contributing to the account with a small amount from each paycheck. Shop around for high interest rates and low fees. The best thing is you cannot access that money until it is released around October. (Of course, the best thing can also be the worst thing if you find yourself needing access to funds, so make sure you have an accessible emergency savings account, too.)
Stick to a Budget
Take a look at your finances and savings before the holidays, and determine how much you can spend without going into debt. Determine who you need to buy gifts for, set a budget on how much you will spend on each person and stick to it.
Make a Spending Plan
Consider all your holiday related expenses in addition to gift spending, such as travel, meals out, and Christmas parties. Look for ways to trim your spending with more affordable options. Instead of a pricey dinner out with friends, throw a potluck.
Search for and take advantage of discounts wherever you can find them with your favorite retailers. Make sure to compare prices and ask retailers to match competitor prices. Place online orders early to take advantage of free or low-cost shipping.
Get Help If You Need It
If you’re struggling financially, the pressure to spend money on your loved ones during the holidays can feel devastating. Keep your head up and stay focused on your financial goals to improve your situation. Take advantage of community resources that provide toys or holiday meals if you qualify. When you build your finances up, you’ll be able to give back if you’re so inclined.
This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.