Planning Personal Finances for Festive Months

by Adam on December 3, 2012

The Cost of Christmas Today

With Christmas fast approaching, many of us are still trying to find the money to fund the big day.

Christmas and New Year are notoriously expensive festivities and the current economic climate only increases the financial pressures on families. In the US in 2011, the average parent spent 271 dollars on Christmas gifts per child, with the average family spending over 700 dollars in gifts in total. When decorations, food and travel costs are included, the total bill often amounts to over 1000 dollars.

Then, most immediately after Christmas, we have the New Year celebrations which again can be expensive especially for those who are out partying on the night in question. So how can you plan to pay for these events? Here we will look at some tips to keep your finances in check over the festive months.

Save on your Gifts

Without doubt, the largest chunk of Christmas money is spent on gifts. Therefore, controlling this area of spending will go a long way to sorting your personal finances over the coming season.
Planning is key, so ensure you set a budget for each person and have an idea of what you want to get them before visiting the shops.

It is a great idea to purchase discounted gift cards before you go Christmas shopping. Such gift cards can save you between 5% and 30% off the face value of items. The average American who spends 700 dollars could, in theory, save between 35 and 210 dollars if he or she bought all presents with a discounted gift card.

Another good money saver is to search online for discount codes and promotional offers. Also look at retailer’s social media sites as they often contain exclusive deals and discounts. Try your best to avoid offers which actually encourage you to spend more. For example, a shop may offer 20 dollars off when you spend 100 dollars. The shopper sees this as a good deal so ensures they purchase 100 dollars’ worth of items and only pays 80 dollars. However, without this offer, the shopper is unlikely to have spent 80 dollars to begin with so the deal actually works in favour of the retailer.

Cash Over Card Every Time

A great way of managing your finances over the festive period is to only pay for items with cash. This makes it much easier to budget as you withdraw what you want to spend and once it is gone you cannot buy any more. Physiologically, spending cash makes you more aware of how much you are spending as you see the physical transfer of the money which you do not with credit cards. Paying on plastic can get you into difficulty. Indeed, 13.6 million Americans are still paying off their debts from Christmas 2011.

Credit Options: 0% Introductory Offers

In an ideal world you do not want to spend any money on credit during the festive period, however, for some this is simply not an option. If this is the situation you are in, it is a case of damage limitations. Apply for a credit card that has a 0% introductory rate – the longer the better. Some cards offer such rates for 6 to 9 months. During this period do your best to pay off the debt. This way you only pay back what you spent without incurring the often high interest rates credit card companies charge. If it is not possible to clear the debt in this time you can always apply for another credit card with an introductory offer and transfer the remaining balance to it. You then have even longer to pay back the debt without attracting any interest.

Plan for Christmas 2013 Now

In order to avoid the financial stresses of the festive months it is best to plan well ahead. Stock up on essentials such as cards and decorations during the January sales. Huge savings can be made on such products soon after the festive period. You could also put away some money each month so you have a reserve for Christmas. Saving 80 dollars a month would leave you with 1000 dollars to spend at Christmas.

Planning well in advance leaves you free to relax and enjoy the holiday season without the stress of worrying about how you will finance the period.

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