Before you get caught up in the excitement and fun of the holidays, take some time to check in with your finances and make a few moves to get ready for the most wonderful season.
1. Make a holiday budget
This should be a list of the money you'll spend between Thanksgiving and New Year's that doesn't include your normal monthly expenses.
Be sure to include the following categories:
- Travel (hotel, fuel, unpaid time off work, airplane tickets)
- Decorations (live Christmas tree, new wreath for the front door, replacement lights)
- Socializing (hostess gifts, food, party-appropriate attire)
- Charity (adopting a family with your office mates, holiday church service offering, pay-it-forward gestures)
- Gifts (immediate family, close friends, office gift exchange)
- Food (special holiday treats and big holiday meals)
2. Create a strategy to save money on holiday shopping
You don't have to sacrifice gift-giving and party-going, especially if you have a well-thought-out plan to pay less for things you normally buy during this time of year.
In general, you'll save money by shopping before the holiday crowds fill stores. You can find some great deals on Black Friday, but you may have better luck staying home and shopping online. Many retailers offer their best deals on their website.
Check out online gift card sites like GiftCardGranny.com to find discounted gift cards to use on holiday gifts or to give away. If you enjoy last-minute Christmas shopping, you could find great deals then, as well.
3. Avoid opening store cards
The deals may seem irresistible, but many store cards now start accruing interest as soon as you make your first charge. Store credit cards often have high interest rates, so pay with debit or cash when possible. Also, having several recent credit inquires can affect your credit score.
If you worry that you won't be able to resist the temptation to open a store credit card, temporarily freeze your credit with all three credit bureaus for free by visiting their websites:
Read the fine print on each site, of course.
If you change your mind, it could take a few days to "unfreeze" your credit. This also prevents anyone else from opening an account in your name without your permission.
4. Start saving now
If you don't have a holiday savings account in place, now is a great time to establish one. Take a percentage or a set amount out of each paycheck and set it aside to help reduce the impact of holiday spending on your regular household budget. Check with your bank or credit union to find out if they offer a holiday account savings plan, too.
5. Rethink your gift-giving plan
Take the pressure off your bank account during the holidays by suggesting that gift exchanges include a smaller budget. For example, limiting spending to $10-$15 gives your budget a break without diminishing the joy of giving and receiving gifts from friends and family.
Enjoy the holidays and set yourself up for success by creating a budget and thinking through your goals so you can prioritize the things that contribute the most joy to the season. If you need a little cash to help your budget and get through the holidays, consider a personal installment loan. These loans are designed to fit into your existing budget, and have set, equal payments for a specific term. That way each payment contributes toward paying down the principle balance, unlike credit cards which may only require a minimum payment where most of the payment goes toward interest.