It can be easy to get caught up in the spirit of buying and giving during the holiday season, only to cringe with regret and remorse when you see your credit card statement come January. From buying gifts, attending holiday parties, decorating, and even keeping your car and home ready for a winter storm, there are expenses that inevitably come with the holiday season.
This year, don’t let the holidays break your bank account and ruin your credit. Rather than let all of these seasonal costs sneak up on you year after year, take some time to follow these simple steps that will help you stay in control of your finances without missing out on any part of the holiday festivities.
1. Start early
Don’t wait for the stores to tell you the holidays are approaching. Start saving months in advance, even at the beginning of the year, so you aren’t caught off guard with holiday expenses.
Ideally, you should create a segment of your monthly budget dedicated to holidays and gifts so that each month an amount is put away for the holidays. This can fund not only the end-of-the-year holidays, but any birthdays or other holidays that come up during the other months as well.
2. Look at the numbers first
Before you even begin your shopping, look at your regular income and expenses for the upcoming months. Determine how much extra you can set aside for holidays. If it’s not as much as you’d like, review your budget to see if there’s somewhere else you can take money from, look into some side jobs, or work a few extra hours a week to avoid relying on credit cards.
As you crunch numbers to determine your budget, consider unexpected events like charity drives, office parties, and last-minute events. Consider past years and what type of activities you usually attend to give yourself an idea of what to expect this year.
3. Determine how many people you’ll be shopping for
Make a list of people for whom you plan on buying gifts. Consider family members, close friends, neighbors, co-workers, and anyone else you might want to show some love. If your list seems particularly long, consider consulting with your family or group of friends to participate in a “Secret Santa” style gift giving, where each person is only responsible for giving one other family member or friend a gift. This is a good idea for especially large families or groups of people.
4. Have an emergency snow fund for car troubles and other unexpected expenses
Keep in mind that there are usually extra expenses unrelated to holidays and gifts that must be considered. If you live in an area that experiences cold or snowy winters, it might be a good idea to set some money aside for snow tires, chains, etc. so your car makes it through the winter. Even if snow isn’t an issue for you, cold temperatures alone can create problems if a furnace goes out or windows need replacing.
5. Find ways to save
Shop in advance when good sales happen. Stores will advertise holiday sales, but you’ll often find that they’re not much of sales at all compared to other sales of the year. You can also save money by using or finding new talents and going homemade. Some stores, especially online, offer discounts for buying in bulk, so if you are having to purchase gifts for an entire office of coworkers or a whole herd of nieces and nephews, consider finding deals on quantities online.
Protect Your Credit this Holiday Season
You can protect your credit, and even work on building a better score, by staying on top of monthly payments and sticking to your budget. For weekly credit repair tips and tricks, read our credit repair blog.