As the holiday season draws closer, many of us are beginning to make plans for gift giving, travel, and parties with friends and family. The excitement that comes with this festive time of year, however, can quickly turn to worry as spending begins to add up. Plan ahead now so that gift giving and travel expenses don’t ruin your holiday season. I find the following money saving tips to be super helpful to avoid overspending and keep the holidays happy and stress-free.
Make a Budget
Making a budget is an effective money saving tool all year round. You can use a budget to plan your finances for a set amount of time. It’s important to make a budget that is accurate and attainable. Trying to stick to a budget that’s too restrictive can lead to going over every month. Especially during the holiday season, having a realistic budget is more crucial than any other time of the year.
Before the holidays come around, set yourself up for financial success by outlining your budget. Write down what you expect to save and how much you plan to spend over the holidays. To create the most accurate holiday budget, list the gifts you plan to give, along with any upcoming big purchases you may have. Creating a budget beforehand and sticking to it can help you avoid unnecessary spending.
Manage Your Spending
Creating a budget means nothing if you don’t stick to it! The easiest way to stay true to your budget is to manage your spending wisely. Take a look back through your recent bank and credit card statements over the last few months to see what you’re currently spending. Consider charging all of your expenses to your credit card to simplify your budgeting process. You can easily see how much you’re spending in one convenient statement. Many credit cards also offer rewards such as travel miles or cash back for every dollar spent. It’s important, however, to remember to pay off credit card balances each month, as interest rates can be very high.
Consider a Personal Loan or Line of Credit
If you find that paying your credit card balances each month is a challenge, consolidating your debt into one personal loan may be a better option. Personal loans typically have a lower interest rate than credit cards. Additionally, a personal loan gives you a fixed payment each month, so if your spending is higher for one month, it won’t ruin your budget.
Similar to a personal loan, a personal line of credit can also help you manage holiday expenses. Personal lines of credit give you a line of credit that allows you to use funds when you need. A personal line of credit can help you manage cash flow at a lower interest than a credit card. Different from a personal loan, where you get a set sum of money up front, a personal line of credit allows the account holder to take out money as it is needed, up to a credit limit.
I hope you find these tips to be helpful as you work to save money this holiday season! Managing your holiday spending with a budget ultimately allows you to focus on spending time with family and friends instead of your finances. After all, isn’t that what the holidays are all about?
Thanks to American Savings Bank for providing this content.