The holidays are a tough time for anyone on a small budget. Between gifts, entertaining, and travelling, the costs of the season can add up, forcing many people to overspend and dip into credit. Last year, the average person racked up more than $1,000 in credit card debt, and they took more than five months to pay it all off.
If you only just paid off your holiday debt, the last thing you want to do is start the debt cycle all over again. Luckily, unlike the non-stop rotation of Christmas music on the airwaves, debt is not an inevitable part of the holiday. You can protect your budget by planning ahead and following these sensible tips.
Use a budget
At first, you need a budget to protect. A budget is a helpful tool at any time of the year, whether you’re trying to pay off bills or planning for a special occasion. It outlines how much you’re really making by tracking your expenses. Once you’ve paid for housing, utilities, payday loans, and other necessary expenses, what’s left is your expendable cash. How you use it now impacts what you can afford in December.
If you’re like most people, your budget reveals you’re spending your money on more than just the necessities. Your budget will have variable costs and frivolous spending. Things like library fines, takeout, clothing, and concert tickets eat into what you can save for the holidays. It’s impractical to think you can eliminate all of these expenses all at once, so highlight the biggest spending categories to see which ones you need to focus on first. Think about how you can cut these costs in half at the start. Once you get used to spending your cash on less, try cutting out more.
Start saving as soon as possible
One of the most effective budgeting tips is to start early. Time is an important factor when you’re preparing for a big event like the holidays. The more of it you have, the more likely you’ll be able to cut out unnecessary spending and set aside the cash you need. It also gives you a bit of wiggle room. It won’t matter if you don’t add to your holiday fund one week or two because you have months to accumulate what you need.
Make a list
The big man himself uses one for a reason. A list helps you organize your chores and the things you need to buy, so you can keep track of what you need to do. It can also help you follow your budget when you make your list with this financial plan in hand.
The National Retail Federation reveals the average person spent $608 on gifts last year alone. Whether you have the same limit, you can allocate your gift budget first between loved ones, then by individual gifts. For example, you’ll probably want to spend more on your children than your next door neighbour. Only put items on your list that fit this breakdown.
Take advantage of sales
The holidays can be an expensive time of year if you pay full price for every gift, decoration, or meal. Though it’s easy to do, you shouldn’t have to empty out your wallet and pile on credit debt to celebrate the holidays. There’s a huge resource of apps that can help you find deals wherever you shop.
Check out a list like this one for apps that help you locate sales in your area. For rebate apps that offer you cash back on your purchases, use this list, and download one of these apps to help you find coupons for the items on your groceries list. These apps are a great addition to your shopping year round, but they’re especially helpful during the holidays when you expect to shop more often. Use these apps in conjunction with sales, like Black Friday and Cyber Monday, to give a boost to their saving power.
Have a backup plan
The above tips make the start of a great plan for the holidays. The earlier you start to budget and save, the better prepared you’ll be for all the season holds. But this plan isn’t perfect — yet. One of the many challenges of the season is correctly anticipating all of your expenses. While it’s easy to write down a list of gifts and plan a meal, it’s a lot harder to predict unexpected bills and repairs you’ll need to cover over the holidays.
You don’t expect plumbing issues, frozen pipes, or traffic tickets to happen when you’re thinking about the holidays, but they do. If you’re lucky, you’ve started saving early enough to cover these expenses, but it can be difficult when you live in a place like Canada, where the holidays start as early as October with Canadian Thanksgiving. Take a cue from these cash-strapped Canadians. They turn to online payday loans from a lender like GoDay. They offer fast online payday loans that are simple to secure with hassle-free terms and conditions. And since they facilitate their loans online, they offer the fastest payday loans Canada has to offer, sending cash in just one hour after approval.
You can find a local equivalent wherever you live. Just remember, a payday loan works best as a backup for unexpected expenses — not the way to finance your holidays. For things you’re expecting, like gifts, entertaining, and travel, it’s better to prepare your budget ahead of time. With the right resources, you’ll be able to protect your finances from the holidays.