The most wonderful time of the year is, more often than not, a cash drain. Most watch their savings rapidly deplete with each major purchase – traveling home to see friends or family, the office party that requires a new outfit, and of course, the ever-growing gift list. If you’re concerned you’ll enter the new year with a bleak financial outlook, there are methods to help manage your holiday spending before it gets too out of hand.
Work Your Budget
Yes, the big bad “B” word is part of the holiday spending challenge. It is important to establish and ultimately stick with a budget around the holiday season for each of the expense categories that may arise. Determine what you want to spend for flights or train tickets, gifts for family, or entertainment, and write it down or add it as a note on your phone. Each time you get ready to spend on a holiday-related purchase, double check your budget to see how you’re tracking. If things are tight, opt to forego the buy or find a cheaper alternative. If you can plan ahead, buy gift cards from the stores where you plan to spend, no more than the amount you’ve budgeted for your purchases.
Get Smart About your Credit
Being savvy with your holiday spending may include using credit to your advantage. Some credit cards offer significant rewards programs that actually save you money during the holiday spending frenzy. If you’re doing a substantial amount of traveling during the season, think about using a travel rewards credit card to work your way toward a free flight or other valuable perks. Similarly, cash back credit cards can lend a necessary hand in replenishing your savings after all your purchases are said and done. To save yourself a financial headache, have a plan in place to repay any racked up balances before the interest hits.
If you’re concerned about going a little – or a lot – swipe crazy during the holiday season, consider taking out a short-term loan for exactly the amount you plan to spend. For West Coast residents, there’s a multitude of loan options available, including auto title loans at companies like The Net Lender, with hubs in Los Angeles and San Diego. This is a strategic way to stay on task with your purchases, and most importantly, it gives you a clear path for repayment after the hustle and bustle of the season has passed.
Give Back in Lieu of Gifting
On average, Americans spend more than $1,000 each holiday season. If you can’t fathom spending that kind of money, you have a strong alternative to gift-giving. Instead of looking for the perfect present for each person on your list, consider giving back to a cause you are passionate about. You can donate your time to a food bank, a shelter, or another community project with which you feel connected. You can let you friends and family know you gave this holiday season, just in a different way.
The holidays don’t have to be a complete drag on your financial picture. Planning in advance for the expenses you have to take on helps immensely, as does setting a solid budget and committing to sticking with it. If you’re concerned about overspending, think about your credit options in terms of rewards and extending your payment timeline. Finally, give your time instead of your hard-earned cash this season to keep your finances in a healthy place for the upcoming year.