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Halloween has got us feeling festive already. Two months later, Christmas will be knocking on your door and a spending spree will be afoot. Like it or not, the festive season can be a perilous time for your wallet.
There is, however, no sense in splurging to have a good Christmas when you’ll only end up crying afterward because you were careless with your money. Being broke is no laughing matter, and no amount of Christmas cheer can make up for it.
To ensure this Christmas doesn’t leave you with debt dramas, avoid the following mistakes:
Mistake 1. Letting Payments Accumulate Over Time
One of the worst things you can do is delay paying bills to free up holiday spending money. It’s important to pay your accounts regularly to avoid penalty fees and mounting debt. As an added bonus, the more you keep a good credit score, the easier it’ll be to access low-interest loans when you need them most. Offered by non-profit lenders, such loans can be life-savers when you slip into financial strife.
Mistake 2. Failing to Budget
The idea of drawing up and sticking to a budget may seem overwhelming. However, there are many times when a budget is the only thing standing between you and financially foolish decisions. There’s no shortage of budgeting apps available to help you stay mindful of your money.
The better you are at budgeting and planning accordingly, the smoother your life will be. Some people may try to tell you that budgeting is “stingy” and that it’s okay to slip into the red, especially over Christmas. So, be prepared to ignore their comments and hold your ground.
Mistake 3. Failing to Plan Ahead
The bigger a family you have, the more money you’ll need to spend on Christmas outfits and gifts. Indeed, your family members are probably already dropping hints about what they would like to get for Christmas.
Use these hints and look at the prices of gifts that you’re thinking of buying in advance. This allows you to budget for how much you’ll need to set aside while also having an eye out for sales and special deals.
Another great way to plan out your gift-giving is to go with something simple, delightfully festive, and universally loved for your whole Christmas list. Gourmet Christmas hampers, home-baked Christmas goodies, and little treats like cinema tickets are easy, affordable, and exciting gifts.
4. Buying Without Reason
Black Friday is a great time to purchase what you need to when nearly 50% has been knocked off the price of most items. However, you must be smart and have a list of things you are certain you need. Stray from that list, and you’re heading into dangerous financial territory.
Window shopping may seem like a good idea, but it tends to lead to one of two outcomes. Either you reign yourself in but then feel deprived or you let yourself go, buy unnecessary items, and then end up feeling guilty.
5. Draining Your Emergency Fund or Investments
There is a purpose to every account that you have. Your emergency fund is there to protect you against the uncertainty of life. Your investment accounts exist because you foresee a future for yourself in which you are financially free.
Sadly, when people run out of cash at the end of December, they often start tapping into their savings, or even worse, breaking investments early and missing out on compound interest. Don’t sacrifice your future goals for a little indulgence today.
Follow the tips above, and the festive season will leave you serene and content, with no financial guilt.