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Nearly 70% of people admitted to making a big financial mistake during the holidays. Let's talk about some of the biggest financial mistakes that most people make and how you can avoid them this holiday season.
#1. Not Setting A Holiday Budget
The holiday season is one of giving which means is also a season of spending. Every year, during this season the average American overspends by at least $1,000.
But the crazy part is, the holiday season is during the same months every single year! We always know when it's coming so in reality there is no reason for us to continuously go into debt during the holiday season. If you set a holiday budget you will decrease the likelihood of overspending by
How to set your holiday budget?
- Begin with writing a preliminary list of your holiday expenses
- Decide on your spending limit
- Make a shopping list
- Track your purchases to make sure you don't go over budget
#2. Not Saving Anything Toward Your Holiday Budget
The holidays are mainly a time for indulging. You eat all of the food, drink all of the beverages and spend all of the money. Starting a new diet or a new budget during the holidays may be too much of a challenge so instead its better to prepare for the indulgence so you can enter the holiday season guilt free.
How to save toward your holiday budget?
- Cut down on non-essential spending as much as possible
- Take the shopping list that you created in step one and estimate the cost of each item
- Decide what you can realistically afford
- Eliminate whatever you can
#3 Shopping At The Last Minute
Shopping at the last minute can cause stress and overwhelm. The easiest way to avoid making hasty decisions is to shop early. This will help you avoid missing out on good deals and getting stuck with whatever price is available. So start as early as possible and shop around as much as possible for the best deals.
#4. Buying Like There Is No January
The holiday season can put us in a space where we feel expected to spend money. We may feel pressure to purchase gifts for family or feel forced to decorate like our neighbors, either way the feeling can cause us to start spending like there is no January.
This causes us to make irrational decisions like putting our purchases on credit cards or buy gifts for friends due to holiday guilt. It appears that all of humanity is spending money during this time so it's challenging to not distance yourself from the consumerism.
Take some time to really decide what it's important to you during this season. Stores use all of the psychological tricks to get you to overspend, so be aware of their cheap tricks and resist them if you can. Focus on your experiences instead of things, give what you can afford, and enjoy your family and friends.
You will save yourself time & money. Happy Holidays!