Home Finance Top 5 Tips for: Financial Mistakes to Avoid This Holiday Season

Top 5 Tips for: Financial Mistakes to Avoid This Holiday Season

 

 

For most of us, the holiday season kicks off with Halloween. October is the month that brings in the holiday vibes. With all the festivities and partying reaching its zenith, your budget gets incredibly overstretched. So much so, that these last months of the year become a nightmare for some!

Americans do tons of shopping in this season. According to the American Research group, every average American spends more than $900 on the gifts alone in the holiday season. Brands take full advantage of the holidays. You will find sales and discounts like no other time of the year. From internet deals to discounts on makeup, clothing, bags, footwear, and the list is never-ending. It’s only natural to get tempted to shop more. 

But before these temptations take a toll on your financial situation, check out the following pitfalls which you must avoid this holiday season!

Don’t Make These 5 Money-Mistakes These Holidays

 

  1. Using Credit Cards or Loans to Shop.
  2. Not Dedicating a Fixed Budget.
  3. Not Saving Up Ahead of Time.
  4. Not Missing any Deal.
  5. Forgetting about Your Gift Cards.

Using Credit Cards or Loans to Shop

 

This happens when you have saved for the holiday season before time. Since everyone is shopping and celebrating, it’s only tempting to start swiping your credit card or take a personal loan to get you through this festive season. 

Well, sometimes it is unavoidable. But most of the time, people are a little too quick to afflict themselves up with this financial burden. Using a cash advance, payday loan, a personal loan, or racking up your credit card debt can be serious jerks to your finances. You will have to deal with exorbitantly high interest, fees, and so much more.

Before you turn to this option, make sure you exhaust every money-saving option that you have. 

Not Dedicating a Fixed Budget

You need to essentially dedicate a budget for your holiday shopping. You can estimate the cost and number of gifts and then dedicate a budget accordingly.  One of the easiest ways to get your finances out of control is when you don’t have a handle on your expenditure. You don’t have to spend hours creating spreadsheets. You can take advantage of technology and use one of the budgeting apps to control your finances. If you are into managing your everyday budget, you will be able to manage your money well throughout the holiday season too. 

Not Saving Up Ahead of Time

Holiday shopping is so tempting that you end up going on an uncontrolled spree. Let’s be honest, the sales and deals are literally hard to miss. You get to take advantage of great discounts and it is the best time of the year to shop for yourself too. It is only wise to save up for these shopping jaunts. Because even if you have planned it all well, the money will run out faster than you have anticipated. 

You know the drill. It’s not your first holiday season. Therefore, be smart and prepared for all the extra expenses. Have a rough estimate of your expenditure in the last holidays and save up accordingly. The best strategy is to put aside a certain amount every month before the holidays months begin. Sudden expenses will not overwhelm you and you will have time to reach your savings goal. 

You can open a separate, savings account dedicated to taking care of your holiday shopping worries.

Not Missing any Deals 

With all those well-orchestrated sales traps and carefully crafted deals, it’s hard not to get tempted to shop till you drop in the holiday season. Whether you need a certain thing or not, you just look at those reduced prices and you are willing to spend. What you can do to control this behavior is to list down things, which you actually need. Whether those items include tech items, home décor stuff, furniture, toys, or clothing, just list them. 

This way you will fulfill your shopping cravings and you will invest in things you need. Remember to focus on the list and steer clear of spending on things, which are not on your list. DO NOT spend only because the deal is great, otherwise, you will end up overspending. 

Forgetting about Your Gift Cards

 

Remember the pile of all those unused gift cards in the drawer of your desk? Those are as good as cash! Save up and use those gift cards to purchase stuff for your loved ones. If you can have them converted into cash, do that and use the cash. You can shop one of those limited-time Cox cable deals or get yourself a handbag. Or, you can use the cash to tick off some of the gifts on the list!

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