Last updated on June 24th, 2020 at 11:30 pm
With the winter holidays around the corner, the season of spending is almost here. The added costs of entertaining and gift-giving may be a challenge to take on, forcing you to stretch your already tight budget to its breaking point.
If you’re worried about the effects the holidays may have on your wallet, check out these money management tips. Here are simple ways to protect your finances during the season of giving.
1. Check Your Credit
When was the last time you checked your credit report? If you’re like 34 percent of Americans, the answer is never. In which case, it’s time to take a peek. If you don’t, you may have no idea there’s a black mark on your file. You’ll assume everything is okay until your application for a new credit card is rejected.
Checking your credit regularly helps you spot these problems, so you understand the kinds of financial products you qualify for. If there isn’t time to make an impact on your history before you apply for help, don’t panic. If your credit card application was rejected, you may apply for a bad credit personal line of credit. This way, you won’t waste any time chasing after products you can’t get. More importantly, you won’t be waking up with a rejection notice as the proverbial lump of coal in your stocking this year.
2. Leave Your Credit out of the Equation
When faced with a big holiday shopping bill, you may look to a personal line of credit for help. At first, tapping into your limit may seem easier than cutting back on the festivities. But the long-term consequences of overspending are much harder to deal with than sacrificing some gifts.
Eventually, you’ll have to repay what you spend — plus possible interest, finance charges, and other fees. More importantly, shopping isn’t what a line of credit is designed to help with. It’s designed as a backup when an unexpected emergency outweighs your savings.
3. Set a Budget
One of the easiest ways to avoid drawing against your line of credit or credit card is by setting a spending limit on the holidays. Spend some time with your budget, tracking your expenses and comparing them to your income. This gives you a good sense of the cash you have on hand to spend.
If it’s a tight budget, consider re-evaluating your current expenses. Can you do without your weekly meal plan subscription? Can you cut down on your entertainment spending? If so, you may free up more cash to spend on the festivities.
4. Host Your Family’s Big Dinner
With millions of Americans traveling for the holidays, fares for flights, train tickets, and even rental cars will be on the rise. Round trip airfare alone may set you back as much as $500 depending on when you buy! By comparison, the American Farm Bureau estimates a big dinner similar to what you have on Thanksgiving would cost just $50 on average. That’s a potential savings of $430 if you can convince your family to make it your way this holiday season.
You don’t have to swear off all the festivities to protect your budget this holiday. You can make merry without the financial hangover by thinking through your options carefully. Even the small decision of where you’ll celebrate can make a huge impact on your finances!
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