Here Are 6 Ways To Spend Smarter During The Holidays
The holidays can be a tempting time to just buy, buy, buy. Here are some tips to help you spend wisely.
1. Set spending limits.
Make a budget – and stick to it. “List all of the gifts and decorations you plan to buy, the parties you will attend and the travel expenses you anticipate. Do not exceed your preset limits,” the National Endowment for Financial Education says. “Decide how much you can afford to spend and stay within that budget,” the Consumer Federation of America and Credit Union National Association say. “Make a price list of all gifts and other holiday items you plan to purchase. Take the list with you shopping to avoid overspending and impulse buys.”
2. Save early and save often.
“You must discipline yourself to save a few dollars from each paycheck during the year,” the American Financial Services Association Education Foundation says. “If you aren’t disciplined enough to save regularly on your own, consider joining an interest-paying holiday savings club at your bank or credit union.”
3. Shop early and be careful when you spend.
“Avoid shopping while rushed or under pressure, which can lead to overspending,” the American Bankers Association says. “Make sure to comparison shop online first, or download an app that lets you compare prices before you buy anything in a store. Before you head to the cashier (or online checkout), make sure your purchase is within the budget you set.”
4. Don’t buy gifts – make them.
Channel your inner Santa’s elf. “Making gifts is a good way to help stay within your budget. Consider baking, knitting, or building gifts for certain people on the list, like neighbors, co-workers, or your kid’s teachers,” Teachers Insurance and Annuity Association of America says. “Chances are, gifts that are small, thoughtful, and homemade will have far more meaning to the people who receive them.”
5. Start thinking about next year.
“After Christmas is a good time to shop for next year’s presents. You can find some great bargains right after the holidays,” the Consumer Federation of America and Credit Union National Association say. “Another benefit to starting early: It gives you more time to find the ‘right’ gift and avoid impulsive decisions, which too often leave you less happy with your purchase.”
6. Set expectations with your family.
“Talk to your kids about expectations for gifts and holiday activities. Be open with them if money is an issue,” the American Psychological Association says. “Depending on a child’s age, parents can use this as an opportunity to teach their kids about the value of money and responsible spending. And be realistic.”
Sources: National Endowment for Financial Education; American Financial Services Association Education Foundation; Teachers Insurance and Annuity Association of America; Credit Union National Association; the Consumer Federation of America; American Psychological Association; American Bankers Association; Investopedia.com.
5 Tips For Staying On Top Of Your Credit Card Debt
Did you go overboard spending this holiday season? The Federal Reserve offers these five credit card tips:
1. Pay on time.
“Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. A good credit record leads to a higher credit score, which helps you qualify for lower interest rates.”
2. Stay below your credit limit.
“If you go over your credit limit on your card, your card issuer could charge a fee and increase your interest rate to a higher penalty rate. To avoid this, keep a record of your spending or check your balance online.”
3. Avoid unnecessary fees.
“Credit card companies not only charge late payment and over-the-limit fees, but also fees for cash advances, transferring balances, and having a payment returned. Some companies charge a fee when you pay your bill by phone. Pay attention to the transactions that trigger these fees.”
4. Pay more than the minimum payment.
“If you can’t pay your balance in full each month, try to pay as much of the total as you can. Over time, you’ll pay less in interest charges.”
5. Watch for changes in the terms of your account.
“Credit card companies can change the terms and conditions of your account. They will send you advance notices about changes in fees, interest rates, billing, and other features. By reading these ‘change in terms’ notices, you can decide whether you want to change the way you use the card.”
Source: Federal Reserve
How Much We Plan To Spend
This year, Americans plan to spend an average of $812 on gifts – that’s up from $781 last year, according to a Gallup Poll. It’s the highest estimate since 2007. One-third of U.S. adults plan to spend $1,000 or more and 8 percent say they won’t be spending anything. Gallup says consumers are “a bit less cautious” than last year about their Christmas spending.