It may be the most wonderful time of the year because of family, home-cooked meals, and cheerful decorations. For your bank account, however, it’s probably one of the worst times of the year. Creating a financial plan during this season is paramount. Don’t let yourself go into seemingly endless debt that collects interest for years and years after your big holiday shopping spree. To help you stay financially sound and recover from the financial loss you will inevitably encounter this season, we outlined our most helpful holiday spending advice:
Track your spending:
Keeping every receipt after your Christmas shopping excursions is crucial. Once you get home from a busy day of shopping, add up all your receipt totals to make sure you did not go over your budget. Doing so prevents you from being unpleasantly surprised by your credit card bill after it’s too late to return the items.
Check your credit score:
Before you swipe your credit card around the shops without thinking, check your credit score. You want to determine how badly any debt or missed credit card payments will affect you and the future of your finances. If your credit score is very low, consider using a different method to pay for gifts this season.
Make a plan to pay off debt early:
If you already know you will be going into debt this season, make sure you create a plan of action to pay it off as soon as possible. The last thing you want is to collect interest that will hold you back for years to come. Whether it’s paying off debt with a tax break, side hustle, or monthly payments, make sure the plan is effective and foolproof.
Make a plan for next year:
Even though planning for next year's Christmas at this point sounds overly cautious, buying gifts throughout the year is the most effective way to ensure your finances stay in order. Therefore, in 2022, set a goal to create your Christmas gift list early on in the year. By doing so, you can take advantage of seasonal sales, ensure you don't go above your credit limit, and spread out your spending to prevent the holidays from arriving as a surprise at the end of the year.
We hope our tips can save you from the burden of years worth of holiday spending debt. Although giving is a beautiful thing, it’s important to participate in the holiday with a specific and attainable plan to ensure you stay financially sound. Otherwise, you will find yourself in a worse predicament next year and won’t be able to give at all. If you need professional assistance this holiday season, our financial advisors at U-Vest® are here to assist you. Call us today to schedule a financial advising appointment.
This article is meant to be general in nature and is not intended, and should not be construed as personal advice of any kind. Please consult your financial advisor prior to making financial decisions. Dustin Johnson, CFP®, ChFC® is a Financial Advisor with U-Vest Financial®, a separate entity from LPL Financial and can be reached at (727) 343-4200. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/ SIPC.