Incorporating holiday expenses into your budget throughout the year can help you avoid debt however it’s not always practical with budgetary constraints or unexpected costs.
If that’s the case, not having any strategy for your holiday spending could lead to overspending and debt which can delay your financial goals. It’s not too to late to devise an idea to make last-minute plans to save some money to spend on the holidays.
The brief window of time at the end of the year could give you time to take money-saving steps which can help avoid the recurrence of holiday debt.
1. Make sure your budget is in line with your financial objectives
In determining the amount you will spend during the holiday season start by planning your budget spending, advises Jason Speciner, a certified financial planner from Financial Planning Fort Collins. Financial Planning Fort Collins.
“Start with how much money you’re willing to spend — and able to spend — on gift-giving and then work your list into that,” he suggests. “Don’t put the cart before the horse and end up overspending because you’ve, you know, put dozens of people on your gift list,” he advises.
If your budget or debt does not allow to spend on holiday expenses, make plans to enjoy time with your loved ones with free activities during the holidays, make gifts , or save by arranging a an unintentional gift exchange. Make sure you are aware of your expectations before the holidays by announcing the people you plan to invite to your party.
The pile of debt at the time of the holidays can be costly and can take more time to repay. Determine how you’ll pay all of your debt and prioritize high-interest debt first. If you have a good credit FICO score of 690 or more A cash-back credit card allows transfer your debt from a credit card and into one that has an interest rate that is lower and possibly with a zero-introductory APR. The typical fee is between 3% and 5 percent for the amount you transfer. In the absence of interest the monthly installments are directly credited to your debt, which reduces the amount it is required to pay off your debt. If you’re not in the best financial standing an effective debt management program by a certified nonprofit credit counseling service could provide relief for those struggling to achieve your goals.
2. Make the most of the bonus-friendly season
If you’re in debt and are looking to apply for an additional credit card, search for one that comes with an initial bonus that can provide additional cash or rewards to help pay for holiday expenses. These bonuses typically provide the opportunity to use three months to fulfill the requirements for spending, and they are more accessible in the event that you’re charging daily and holiday costs. A credit card that has a zero APR on purchases could be a great way to save money on interest over a period of time.
3. Earn cashback rewards using cash-back applications
Cash-back apps can provide more value from everyday purchases. It might require you to upload receipts however, according to Krystal Sharp who is a coupon expert and the creator of the blog Krys the Maximizer, it’s well worth the effort. She makes use of Ibotta as well as Fetch Rewards as well as other applications to earn cashback as well as a gift card.
These apps allow you to add deals in-store or online at specific retailers, and receive the cash back on purchases that you purchase. You can also submit a receipt to redeem some discounts. You can also earn rewards by referring others. To maximize your worth, Sharp uses a rewards credit card to pay for purchases and to accumulate the rewards.
“I’m trying to focus a lot on how can I earn gift cards, how can I get referrals, how can I save enough at the store and use my store rewards to buy things we need for the holidays,” she says.
Based on the amount you spend, it’s feasible to earn anywhere from $20 to $25 over the course of a week or two with your everyday purchases which is typically enough to withdraw in the event of a loss, as per Sharp. The money you earn will increase over time.
4. Spend less with the ‘no-spend-challenge’
One of the best ways to save is to avoid making unnecessary purchases during a specific time. Try an all-spend month, zero-spend weekends or weeks with no spending depending on what you prefer. The savings can be used to be used to pay for any expenses that may arise for the holiday season.
In the case of Courtney Clarke, a New York-based content creator for TheLifeOfCo YouTube channel, a “no-spend November” helped her to stay in line with her debt goals for 2020. In the course of a month she only spent her money on necessities, and avoided dining out or doing things that consume money.
“I definitely can’t say that I was perfect in the matter, but it’s just a nice reset to retrain your brain,” Clarke says. Clarke. “It’s just making sure that you’re attempting to get the best out of it.”
She admitted to dining out, when she didn’t have enough time to cook the meal, however, even when she snuck out, she managed to save over $300 in the month.
5. Get a side hustle
Earn some cash for the holiday season by taking on one of these jobs now or cleaning your home. If you are looking for gig jobs you can find a variety of tasks that you can do during your free time, from ride-sharing to delivering. If you’d rather make money, you can sell the clutter-producing items from your wardrobe to consignment shops.
“I sold a ton of stuff to Plato’s Closet and Once Upon a Child to get rid of it,” Sharp says. Sharp. Sharp estimates that she makes around $50 per visit which is between $200 and $300 per year.