It's now October which means the holiday expenses are about to roll in. October means Halloween costumes, decorations, and candy. November means a 20-pound turkey and travel costs, and December means gifts for your family and friends. It’s amazing how quickly it adds up! Though the holidays are meant to be a time of peace, joy, and relaxation, the season often leads to stress, anxiety, and fear.Start a new trend for your holiday season and consider these 10 tips for financially preparing now for the upcoming holidays.
1. Make Budgeting EasierBudgeting (and keeping on track with your budget) is not easy, but budget-savvy tools can help. Look for a free download of an Excel spreadsheet formulated to do all of the adding and subtracting for you. If you are willing to spend a little, there is also budgeting software that boasts features that not only do the math for you, but also help you stay on top of your budget. Many programs track your spending and offer free financial classes and lessons. The one-time fee for a budgeting program may be worth it for financial stability.
2. Build Savings NowYour biggest holiday expenses will most likely come at the end of the year. If you begin now, you have approximately two and a half months to save. Assess your budget and determine the maximum amount you can set aside until then. Put some of each paycheck into a savings account, and don’t touch it. That savings account is your ticket to a stress-free holiday.
3. Create a Plan to Pay off DebtAlthough eliminating your debt before the holidays is virtually impossible for most people, a solid strategy for eliminating financial obligations can renew your hope this holiday season. You could consider the ideology of a financial guru, or you might look into a debt consolidation plan if your obligations are simply too many to handle.
4. Shop for Better Insurance PremiumsToo often Americans fall into the routine of paying a monthly expense and then forgetting about it. While it may seem convenient to stick with the same insurance premium, in reality, you could be losing hundreds of dollars a year. Car, health, home, life, and other insurances often change rates, meaning that your current plan might not be the best deal anymore. Take the opportunity to compare rates and prices to ensure you are paying the least amount possible for your premium.
5. Examine Your SpendingOnline banking and apps make it easier than ever to track your spending. Take a look at your accounts and add up how much you have spent on certain categories, such as food. Once you are aware of how much your little purchases are affecting your budget, you can plan to cut them down. Pack a lunch every day rather than heading to the nearest restaurant, or get as much out of that tube of toothpaste as you possibly can before buying more. You’ll be surprised how much you save when you make small changes.
6. Avoid Impulse SpendingIt probably doesn’t seem like it could hurt your budget to spontaneously take your family out for dinner on the way home from a sporting event. And maybe such a whim wouldn’t hurt just once. However, repeated impulsive spending can quickly become a financially damaging habit. In regards to shopping in general, remember that you can often find certain products online or at other stores for a better price. Instead of purchasing the first bicycle you see at the first store you visit, shop around before making a calculated purchasing decision.
7. Reevaluate Your MortgageIf your current interest rate on your mortgage is doubling your payments, now’s the time to review your options. You might find a new mortgage with low enough interest that your monthly payments decrease and you can put some of the extra into savings.
8. Consider the Necessity of Each Monthly ExpenseTake a good, hard look at such things as gym memberships, cable and phone bills, and other consecutive monthly expenses. If you are only visiting the gym once a week or less, your costly membership is probably not worth it. Likewise, you might not need unlimited talk and text on your cell phone if you are using less than 1500 minutes a month. For more information about cutting such expenses, see this article.
9. Don’t Underestimate CouponingCouponing often has a negative connotation, since nobody likes to be in the checkout line with someone fumbling through ten different coupons for the cashier to scan. However, collecting coupons can cut some purchase costs in half, which will show in the long-run.
10. Set Goals for Next YearIf you plan months in advance for the holidays, your finances can be in tip-top shape. Take a minute to set some realistic goals for the following year. You might consider opening a high-interest savings account dedicated solely for the holidays. Then, plan to set aside a small portion of every paycheck to help make next year’s holiday season the best yet.
(Author: Amber Brubaker)