“By failing to plan, you are planning to fail” Benjamin Franklin
Holidays are a great time to gather with family, have fun with friends, and experience the joys of the season. Unfortunately for many, it is also a time for overspending, bad financial decisions, poor judgment, and stressing out about money. Nearly 68% of consumers get into trouble during the holidays by financing there spending using major credit cards, like Visa, MasterCard, and American Express, and almost 18% of shoppers rack up debt on store-specific cards from their favorite retailers like Macy’s, Kohl’s and Costco.
Approximately 14% of holidays gift-givers take out personal loans, payday loan or access their home equity to cover their spending. Over half of holiday shoppers rack-up more than $1,000 of holiday debt and often take months to pay it off. If you are making the minimum payment of $25 on a $1,000 debt, do you realize it will take until 2023 to pay it off?
Over that time, you will pay an additional $505 in interest! Don’t let this be you – have a plan! By following the steps below, you can PLAN for stress-free holiday spending and start the new year without unplanned debt!
1. Make a plan and stick to it!
Do you really need to buy a gift for everyone on your list? Maybe it’s time to stop buying presents for your neighbors or the friend you only see once or twice a year. Is there something you can do that is more meaningful and economical? Make holiday treats instead or have a potluck dinner and let everyone contribute.
2. Set a budget.
Be realistic about what you can spend. For every dollar you spend for the holidays, trim a dollar from your everyday budget – skip eating out, pass on the Starbucks, bring your lunch, if you look closely, they are many ways to save your budget and have the money you want for gift-giving.
3. Shop online.
Once you have your list, research bigger ticket items, so you know if the price you saw at Costco really is a good deal. Online shopping (with a list) can also cut down on impulse shopping.
4. Pay with Cash.
When you use cash, you can only spend what you have. Using cash instead of cards is also another way to control spending on a whim.
5. Plan for the future.
There are many great sales after the holidays, and you can often get deals that you won’t see any other time of the year. If your budget allows, buy when prices are the best, so you are ahead of the game before the next holiday season, or birthday or other gift-giving occasions that are guaranteed to pop up.
Having a plan will help you keep your holiday spending within your budget and allow you to start the New Year off stress-free! We can show you how to build a plan so next holiday season, you will have the cash you need and not have to rely on high-interest credit cards.
Give us a call today to learn more – we are here to help you put a plan in place and reach your financial goals!
