The average American goes $1,000 into debt by January because of holiday expenses. Between gifts, parties, food and travel, the money spent on the holidays can add up quickly. These surprise payments and potential debt can easily be avoided if you start planning now.
Create a Holiday Budget
While we recommend having a weekly or monthly, establishing one for this time of year can help your season be a little merrier. If the word budget sounds too intimidating or restrictive for spreading holiday cheer, just think of it as a plan. You can make this as simple or detailed as you like—just remember to be realistic so your financial accounts don’t feel the winter blues after the New Year.
Automate Your Savings
Plan to set aside a small amount each week or each paycheck just for holiday spending. You can do this within the budget you set or you can automatically have that money transferred into a separate savings or checking account. Doing the latter makes it clear where the money is supposed to be disbursed. Starting to save now will help you avoid big surprises in December.
Use Rewards and Points
Do your credit cards or frequent shopping destinations allow you to acquire benefits? This could be the time of year to use them. If not, consider switching to ones that allow you to build up rewards such as cash back, free gift cards and extra discounts. You might be surprised how many goodies you can buy from points you earned from previous spending. Nothing says holiday cheer quite like free!
Research to Find the Best Deals
Waiting until the last minute to do your shopping won’t do your wallet any favors. Take some extra time this year looking into when and where to find the best deals, as well as if there are any bulk discounts, coupons or additional gifts that can come with purchases. Plus, planning ahead helps you save money on unnecessary expenses like last-minute shipping.
Shuffle Your Expenses
Consider where you are currently spending your money on a weekly basis and determine if there are any purchases that can be put on pause or reconfigured until next year. Maybe that means eating one less meal out during the week or making coffee at home instead of stopping by your favorite spot each morning. Little adjustments can add up in big ways – even if the extra saving turns into a present for yourself.
Written by: Alan Althouse, TruWest Credit Union
Alan Althouse is the President and CEO of TruWest Credit Union. TruWest Credit Union is headquartered in Tempe, Ariz., and operates as a cooperative to provide its members with a lifetime of quality financial services and a culture of caring for its members, employees and communities. TruWest has more than 89,000 members and assets totaling more than $1 billion. TruWest Credit Union has 13 branch locations—nine in Metro Phoenix and four in Austin, Texas. For more information, visit truwest.org.