Stay Out of Debt This Holiday Season


As the holidays quickly approach us, it’s time to take a look at our finances and holiday spending.  One of the ways you can be sure to have a stress-free holiday is to not go into debt buying Christmas gifts.  If you don’t have the money to buy gifts this year, you shouldn’t charge things on your credit cards just to have something to give.  However, with the right planning, you can stay debt-free and give your loved ones something special for the holidays. Here are a few tips that will help you have a debt-free Christmas.

Budget and Plan in Advance

As with most tips to staying debt free, the first thing you must do is make a plan.  Figure up how much money you will need for gifts, events and food this holiday season.  Write down that total amount and divide it by twelve. The total is the amount of money you need to save each month to meet your budget by Christmas.  If you start to plan for the holiday season in January, you won’t have to stress about not having enough money at the end of the year, which is a contributing factor for debt.

Make Your Gifts

If you find yourself in the situation where you didn’t plan ahead and money is tight, then consider hand-making your gifts instead of going out and spending a bunch of money.  The act of giving gifts during the holiday season is just to show your loved ones that you care about them. This can be done through inexpensive homemade gifts like baked goods or crafts.  Remember it’s the thought that counts. Check out Pinterest for some homemade gift ideas.

Sell Things for Cash

If crafting isn’t for you, don’t worry!  There are ways to make some extra cash if you need money for gifts.  The easiest way to do this is to sell items you no longer want on platforms such as Ebay, Craigslist, Letgo and Facebook Marketplace.  You can sell old clothes, books, electronics, kitchen appliances, baby items, etc…there’s a market for most items in your home. Selling those items will give you enough cash to buy gifts if you find yourself in a bind at Christmas.

Pay Off Cards

If you use credit cards for any reason (like gaining rewards points for purchases), it’s important that you always pay off your cards completely when the bill is due.  If you don’t, you will be incurring interest, which will end up costing you a lot of money in the long run if left unattended. If you pay off your cards in full, you won’t have to worry about outstanding debt.

These are just a few ideas of ways you can stay out of debt during the holiday season.  Check out some of our other blog posts in the archives for more debt management tips.

Tips for Using Credit Card Rewards

On this blog we have talked about the dangers and pitfalls of credit cards, however not all credit card usage is bad.  If you are the type of person that can use self-discipline with credit cards, then it might be beneficial for your finances to consider cards that give rewards back just for using them.  Not all rewards credit cards are the same, so if you are interested in making credit card rewards work for your budget, there are a few things to consider.

Find What Works

When you start to look at all the rewards cards that are available, it’s easy to get overwhelmed.  These days you can probably find any kind of rewards you want. There’s cards that offer cash back, air miles, gift cards, free cruises and more!  Doing research and figuring out what kind of rewards you are interested in before applying for the card is best. Don’t apply for a card with air mile rewards if you never travel.  If cruises are your choice of vacation, then apply for a card that lets you build points towards free trips. The point is, find a card that fits your lifestyle.

Cash Will Always Work

For most people, the rewards card that works the best is always one that offers cash back.  This type of card is especially good for those who are on budgets and need a little wiggle room.  You can find cards with up to 5% cash back on certain purchases. Little by little all those purchases will add up to a nice little bonus check when you cash them in.  Again, do your research and find a card that fits your needs and will give you the most bang for your buck in terms of cash back points.

Just Use One

To get the most out of your rewards card, you will need to run all your spending through that one card.  This is where the self-discipline part comes in–you will have to pay off the balance every month in full.  This way you will avoid interest charges, and you will rack up points fast to get the most rewards. Use the card for every purchase you make, just like you were using your checking account.  Just make sure you keep immaculate records so that you won’t overspend and not be able to pay if off the next month. This is the fastest way to get the most rewards.

Keep Track of Everything

When you use a rewards credit card as your main tool of purchasing, you will need to make sure that you keep track of absolutely everything.  Not only do you have to keep track of your spending, but it is important to keep track of any changes to your credit cards terms and conditions or how long you have until your rewards points expire.  The rules are different for different cards, so you need to read the fine print and know exactly what you are getting into and keep track of any changes you see.

Using credit cards to gain rewards can be a very nice addition to your income if you play the game properly.  Following these tips should get you started off on the right foot.

How To Avoid A Financial Crisis This Holiday Season

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.

Track Spending

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.

Gift Ideas to Inspire Financial Health

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.

Investment Fun

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!

Help Education

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.

Good Money Habits for Young Adults

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.

Learn Self-Control

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.