Christmas is around the corner, and it’s time for gatherings with friends and family and some shopping. With all the ongoing festivities, it is easy to get carried away and burn a hole in your wallet. To stay out of debts this holiday season, plan and manage your spending ahead of time.
Prepare a gift list and holiday itinerary
Draft your list based on the receiver’s preference and needs. That way, you can minimize waste and make sure you stay within your budget. As there’s still time before the holidays start, do shop around the physical and online shops to get the best buys. DIY gifts can be thoughtful and meaningful, while saving yourself some money. Aside from listing out gifts, do take some time to jot down the number of the gatherings and parties you’ll be attending and their costs. For dinner parties and the like, take advantage of mobile apps that offer discount if you make the reservation through them.
Budget control
To have a good overview of the amount of money you’ll be spending this season, list out the costs of the gatherings and parties you’ll be attending, and combine that with the amount from your gift list.
After reviewing the cost of your holiday spending, check whether it’s within your budget. If it’s not, you may want to adjust your everyday spending, or cut back on your gift list, whether it’s the number of recipients or the value of gifts. For gathering invitations, take some time to screen out which ones you really want to go. To have more saved up for the season, you could consider working a few more extra hours at your part time job or take up some freelance assignments.
The illusion of “min pay”
To better control spending, pay with cash instead of credit card. When you do pay with credit cards, make the effort to repay in full. Say if your credit card balance is $20,000 and you make just the minimum payment (“min pay”); based on the monthly interest rate of 2.6% (APR: 36.4%), it’ll take 26 years to clear the outstanding debt. No holiday is worth putting yourself in debt!
The season of charitable giving
Besides gatherings and dinner parties, there’re many ways to celebrate the holidays. Volunteering with your family and friends, donating gifts or money to charities, are also meaningful ways to spread the holiday spirit.
Download IFEC’s Money Tracker app to budget and plan a “debt free” holiday while soaking in the joy of the season.
