This time of year can be so much fun, as we celebrate the holidays with family members and reflect on the year that was.
For many, it can also be a stressful time, as they try to manage the extra expenses that come with all of the celebrations.
A recent survey conducted by LendingTree discovered that 25% of Americans struggled to pay off subsequent debt from holiday shopping. The problem might result from the fact that more than 50% of Americans don't plan on creating a budget this year.
Last year, 41% of Americans admitted they had some financial regret related to spending after the holiday season. Though it's easy to get wrapped up in the giving mood of the holiday season, it is important to think about your finances ahead of time so that you won’t have regrets or end up in any unwanted financial trouble.
As the Holiday season approaches, we wanted to share our tips on how to keep the financial stress to a minimum so that you can focus on the celebrating with loved ones.
1. Make a Budget & Stick to It
Be realistic and think about what your obligations are over the holiday season. Also, know who you plan on buying gifts for, set a number that you feel comfortable spending, and then stick to it.
This means cutting down on the number of people you buy gifts for. For example, not every person at your office needs a gift, nor do they expect it. Secret Santa exchanges are great not only for offices but also for big families.
For the friends and family who were naughty this year, a little bit of coal will cost you a couple of dollars at most
2. Don't Procrastinate
Do you have to travel? If so, plan early and ensure you get better pricing on flights and other travel related expenses.
Planning early goes for shopping expenses as well. Not only can you get better deals by starting your search earlier, but you will have time to price compare.
According to the LendingTree Survey, of those with holiday spending regrets, the most significant was shopping procrastination (38.3%), followed by not comparison shopping (27.0%)
3. Find Ways to Save Over the Next Few Months
Can you manage without your fancy morning latte and instead make a cup at home before work? The little things can really add up!
The more you can lower your normal monthly spending between November and January, the better off you'll be when those added holiday costs hit you.
4. Become a Coupon Collector
We all do it – we toss out hundreds of coupons every month that come through our mailbox, whether that be your physical mailbox or your virtual one.
Take a closer look at the coupons you receive over the next few weeks, and see how they can help lower your holiday expenses. If you're an avid online shopper, take advantage of websites that offer great deals.
5. Personalized Over Pricey
Spend some time thinking about what your friends and family really want or need this holiday season. Sometimes a thoughtful and personalized gift that tells your loved one that you’ve been paying attention is much more appreciated than that fancy and pricey gift.
For example, if your sister recently got into cooking, buy her your favorite kitchen must-have, with a little box of your favorite recipes typed out or copied from your collection.
6. If You Need to Borrow Money, Borrow Wisely
Are you racking up credit card debt to pay for your shopping list? Average credit cards can carry APRs of 18% to as high as 25%. Some of the most expensive cards are the ones offered by the stores themselves, which come with high fees and APRs.
Be careful not to get drawn in by the side deals the stores offer you in exchange for opening up a card with them, such as 10% off your purchase or the promise of future rewards.
Instead, think about refinancing your credit card debt with a lower interest personal loan or looking into a new credit card that offers 0% APR for the first year that you can use for new purchase or for a balance transfer. A low interest rate loan will cut your interest payments and put you on the path to eliminating your debt quickly.
In the end, just remember to relax and enjoy the holiday season. You don't have to let your finances rule you.