By Jake Serfas
With the holidays rapidly approaching, it’s important that you don’t get thrown off track financially. Here are five great tips to stay on financial track this holiday season, while also setting yourself up for a great 2017.
Did you know that 78% of people overspend and go over budget during the holidays?! It’s critical you don’t become one of them. Before you start splurging, it’s important to take a look at how much you have saved and what you were planning on spending. Build a budget and write it down! If you write it down you are 50% more likely to follow through with it then if you just made a mental checklist. There are a number of online resources available to assist you throughout your planning process. Inside of your overall holiday budget create a “micro-budget,” designed for how much you want to spend on people you are shopping for. This may help make a tremendous difference so you don’t end up going over budget like most people do. The more specific you can be, the better.
Stay away from high interest credit cards! It can be easy to run out to the store and just start swiping away. When it comes to using credit, it can give us an overinflated sense of money we don’t have. The last thing you want to do is overspend. The debt and interest that comes with overspending can end up costing you big over the next several months while you’re trying to pay off your debts. If you are going to use credit cards to purchase holiday gifts, make sure you have the cash available to pay them off so you aren’t stuck paying interest to financial institutions (this can be a great way to accumulate points and bonuses with your credit cards, just be strategic about it!).
It’s never too early to start saving! The more you can save, the more you can spend comfortably! When it comes to saving money for the holidays, consider setting yourself up with an automated savings plan. Think about it, you pay most of your bills automatically and have them drafted directly out of your account, so why not set yourself up with automated savings deductions. Small systematic amounts add up to large buckets of money over time.
Do your research! If you are planning on purchasing big ticket items for the special people in your lives, shopping around and looking for deals could end up saving you a lot of money. Whether it’s buying a new television or a piece of sporting equipment, taking some time to compare prices, whether it be online or with different stores, can make a huge difference. The larger the item the greater potential savings. Keep an eye out for price matching, different coupons and deals some stores offer. You can end up getting great deals if you don’t wait until the last minute.
Research shows that the average person spends roughly 1.5% of their household income on the holidays. Living and spending within your means is very important if you want to make sure you don’t enter 2017 with a mountain of debt. This is a great way to start your budget process. Now, we all know when it comes to our loved ones, we want nothing but the best for them. And in turn, they want the best for you, which means not having you end up in a mountain of debt from the holidays. Don’t feel the need to keep up with everyone else on the holidays, spend only what you’re comfortable with. The holidays are a time for joy and happiness and shouldn’t have you anxiously spending money you don’t have or aren’t comfortable spending.
You’ll survive this holiday season without ending up in debt if you build a budget, save your money, avoid high interest credit cards, shop around and don’t keep up with the Jones’. Create a plan of how much you can afford to spend, spoiling your loved ones doesn’t have to cost you an arm and leg.
Jake Serfas is lead financial strategist at O’Dell, Winkfield, Roseman and Shipp in Washington, D.C.