Many people who normally live within a budget during most of the year, throw caution to the wind during the holidays and spend much more than they can possibly pay back when the bills come due in January.
The tragic result is that interest charges start accumulating that often take months to repay, particularly when only a minimum payment is made.
Yes, it’s that most wonderful time of the year. And you can hardly be blamed for wanting to give, and to celebrate. However, such behavior, which is unfortunately the norm for many consumers, derails plans for achieving financial goals and objectives. It also causes a great deal of stress, all of which can be avoided.
In order to avoid this annual ritual of overspending we suggest considering one or more of the following strategies:
- Save monthly in a “holiday account” so that money is available to make purchases around the holidays. This puts holiday purchases in the same arena as every other expense one faces throughout the year and puts limits on what can be spent.
- Never charge more on a credit card than can be repaid when the bill comes due. The interest charges that accumulate when bills aren’t paid in full are higher than one could ever expect to earn through investing, and can take months to repay.
- Use a debit card rather than a credit card whenever possible. This helps curb overspending by limiting purchases to the cash available in your bank account.
- Whatever your holiday traditions might be, consider focusing on the non-monetary aspects of the season. Remember that the things that matter most in life involve the love and friendship of other people. The holidays can be a wonderful time to build on our relationships with others. This can be achieved with a minimal outlay of money.
What strategies do you enlist to avoid overspending?
Here’s wishing you a joyous holiday season and a healthy and prosperous New Year!