The holiday season is in full swing! It’s time to trim the tree, buy gifts and celebrate with family. However, you don’t have to go into debt and a potential financial crisis to have a happy holiday–there are many things you can do to avoid the ugly post-holiday financial hangover in January. Here are some preventative tips to avoid a financial disaster at Christmas.
Plan, Plan, Plan
As always, the first step to avoid financial danger is to plan out everything. Make a holiday budget that includes everything from how much money you have to spend to a breakdown of who you need to buy for and how much you are willing to spend on each person. If you plan out your purchases, you will be less likely to have any surprises when the bills come due in January.
Avoid Credit Cards If Possible
When purchasing gifts, try to avoid using your credit card. You don’t want to start the new year off with a high credit card bill and a bunch of payments you can’t afford. Instead, see if your store offers some sort of layaway program. Many stores offer this around the holidays, and it is a very effective way to avoid debt but still be able to make payments on items you wish to buy. The store usually requires you to put down a small payment to hold the item. Then you pay on it when you can until the agreed upon date. Once you’ve paid it off, you can take it home with you. If you don’t end up paying it off, you do lose the money you already put on the item and you will not get to take the item home, so be sure of your purchases if you decide to take this route.
When you finally do purchase all of the items from your planned budget, it is always a good idea to keep track of every purchase. Write down every purchase you make, and keep receipts in case you need to make a return. This will help you see how closely you stuck to your budget, which will help you plan for next year more effectively.
Use the Dollar Store
Once you have all of your gifts purchased, it’s time to make them look pretty! Instead of going to the Hallmark store (or even Walmart) for all of your gift wrapping needs, take a look at what your local dollar store has to offer. Most of the time you will find beautiful wrapping paper, bags, tissue paper and bows for a fraction of the price at another store. The dollar store even has scissors and tape to help you as well. Always check out the options at the dollar store for gift wrapping before purchasing it elsewhere.
Start Planning Immediately
When the holidays are over, start planning for next year’s Christmas budget immediately. This may sound like overkill, but if you can start saving a little money here and there for Christmas every month starting in January, you will be way ahead of the ballgame next time the holiday season rolls around. Take a look at your plan from this year and see what worked and what didn’t work and use that to start hatching a plan for the next year. It’s never too early to start a good plan.
If you need help planning out your Christmas money for next year, take advantage of WCU’s Christmas Club where we help you put money back each month automatically. You will receive the money just in time for you to shop for gifts near the holidays. To enroll in this program, just give us a call at 256-355-5010, and we can get you set up!
Holidays can wreck your finances if you don’t have a clear cut plan in place, so take this advice and have a successful holiday season.
What do you gift a person who has everything? When it comes to some people in your life, a little creative gift giving might be in order for the holidays. Why not give your loved one the gift of inspired financial health? Here are some non-traditional holiday gift ideas that can help or inspire people to get in financial shape.
When it comes to teaching kids about investing and the stock market, why not give them a little hands on experience? You can gift them a small sum of money that they can invest in a “fun” company of their choice–like Disney for example–that will peak their interest. Then you can show them the basics of investing and watching the stock market. If they are interested in the company and feel they have “ownership,” they will be more likely to take an interest in learning where their money is going.
Start Retirement Young
Another great gift for teens and young adults would be to start a retirement fund for them. You can give them a sum of money to start their fund or you can match whatever they put in to mimic an employers match. Whatever way you decide to do it, teach them retirement fund basics along the way, like how much they can contribute per year and what the different types of retirement accounts mean. You can never start too young!
A great gift for your kids or grandkids is to start a 529 Savings Plan for their education. This gift may seem boring to the kid at first, but when they are older and don’t have to take out student loans, they will thank you. This not only shows that you support their education, but you can contribute a small amount to the plan each year as additional gifts.
Personal Finance Books
Books about personal finance topics are a great gift for those in college, just starting out on their own or young newlyweds. Books such as The Total Money Makeover by Dave Ramsey or The New Retirement by Jan Cullinane and Cathy Fitzgerald are just a couple to get started with. Check out our previous blog post about great books on financial topics.
Giving those you care about gifts that help them financially is truly the gift that keeps on giving. So keep that in mind next time you are on the hunt for the perfect holiday gift for a loved one.
Some of the most stressful times in a young adult’s life can be when they get their first real job and have to manage all of the adult responsibilities that come with making money. Up until that point, most people rely on parents or guardians to help them out with their finances, but there does come a time when it’s all up to you to figure it out. To make sure that you get started on the right foot, we have laid out a few habits that are great to learn when you are young so that your financial future will be bright.
Know Where It’s Going
One of the first habits anyone should learn about managing money is to know exactly where your money goes. If you can master the art of keeping track of all of your finances and making a budget that fits your lifestyle, all of the other money habits will come easy to you.
To get started, just make a simple list of your incoming and outgoing expenses. Start to think of how much you need to spend, save and give, and make notes each month on what worked and what didn’t. Keep track of every transaction you make, whether it be by hand, using Excel or even a tracking app like Mint or You Need A Budget (YNAB). Pretty soon, budgeting and tracking will become second nature to you.
Save for Emergencies
Another great habit to learn while you are young is to start an emergency fund and regularly contribute to it. Open up a savings account that you vow to only touch in case of a true emergency. Every month when you make your budget, add a line item for your emergency savings. If you automatically put it into your budget, you will build a habit of contributing something to it regularly. Most experts recommend at least having 3-6 months of expenses in your emergency fund to be on the safe side. If you put in a little each month, it won’t be long until you reach that goal.
Think About Retirement
You are young, and retirement is a long way off, but it’s still a good idea to start contributing to it now. Just think, the earlier you start, the more money you will have when you hit retirement age. There are many ways to contribute to a retirement account. Most of the time your employer probably offers some kind of 401K or pension plan. If they don’t, you can open one up yourself and contribute to it regularly. Just get with a local financial advisor and they can get you started. When you learn to contribute to retirement early, you are setting yourself up for a more stable financial future.
One of the best ways to ensure you do well with your money is to learn self-control. Try to control the part of you that wants immediate gratification everytime you see something you want. If you can learn to control your spending and say no to yourself every once in a while, you will be miles ahead of many people twice your age. People with good self-control are more likely to stay out of debt and have fully-stocked emergency funds. Having self-control will put you on the right path to personal financial success.
No matter what your age, these four habits can help get you on the right path with your money.
Everyone knows the holidays can be expensive between the gifts, decorations, food and travel. But decorating for Christmas doesn’t have to be super expensive. There are lots of ways to save a few bucks while still making your house festive.
Making your own decorations is not as hard as you might think. There are tons of tutorials and decoration ideas on Pinterest and YouTube. From making your own wreaths and ornaments to more elaborate outside decorations, you can pretty much find instructions for anything you could ever want in a decoration scheme.
Use the Dollar Store
Sometimes dollar stores can be great, and the holiday season is definitely one of those times. Dollar stores tend to carry many decoration items such as fake flowers, items to make wreaths, stockings, bows and other trinkets you can use in your DIY projects. With a little imagination and some of the online tutorials we mentioned earlier, you can transform your home into a holiday wonderland without breaking the bank.
Sometimes the best way to save money is just not to go all out for the holidays. Less can be more in some situations, and if your wallet is hurting this holiday season, just stick to the basics. Put up a nice tree with your decorations from previous years and stick a wreath on the door. These decorations will still make your home feel festive, but they won’t overwhelm your senses or your wallet.
Realizing the holidays aren’t about the “stuff” is important. If you are under a budget or simply like being frugal, use this upcoming holiday season to focus on your family, friends and community rather than what all you have to buy to keep up with your neighbors. Use these simple tips to help you stay in the holiday spirit no matter how much money you have to spend.