12 Money Mistakes You Need to Stop Making During the Holidays
We all find ourselves feeling a little cash-strapped during the holiday season. But, celebrating the holidays shouldn’t leave you out of pocket. If you’re smart, you’ll be extra savvy with your money over the Christmas period. But, if not, you’ve probably made a lot of the following mistakes. Here are 12 money mistakes you need to stop making during the holiday season.
1. Dining Out Way More Than Usual
The holiday season is packed to the brim with parties, meet-ups, and gatherings. So, you’ll often find yourself frequenting bars and restaurants a lot more at this time of the year. However, try not to overdo it, as you might find yourself eating dollar meals in January.
It’s best to only go to social gatherings that you can afford, as going out most evenings will make your budget explode. Instead, you can try inviting others over to your house or visiting friends for a home-cooked meal. This will keep costs down, and you won’t be forced to miss out on the social aspect.
2. Not Making a List
Apparently, the average American shopper will spend $882 on holiday gifts per year. This is a ridiculous amount. Yes, you want to get your family and friends a gift that they will love. But, you need to cut this number down.
To keep track of your spending, write a list of people that you want to buy gifts for and a budget for each gift. This way, you’ll avoid impulse purchases which lead to overspending.
3. Assuming You Will Save Extra Money in January
To feel less guilty about spending money in December, we often make promises to ourselves that we’ll save extra in January. But, if we’re feeling the pinch this month, it’ll only be harder in the new year.
Abby Eisenkraft CEO of Choice TaxSolutions Inc, says, “If you don’t have the money now, chances are you won’t have it January either and you will be facing bills you can’t pay.” She continues, “It’s tough, but try to have the self-control to not dig yourself into a hole financially.”
4. Falling for Cheap Sales Prices
The stores are currently filled to the brim with discounts and sales, not to mention Black Friday and Cyber Monday. But, try not to fall into a spending trap just because prices are cheap.
Genti Cici, CFP, and founder and CEO of StandUp Advisors says, “Many of these unplanned purchases are typically put on credit, which means they’ll follow us into the future and we’ll pay much more than we have, due to high interest.” If you see a bargain, take a day to think about if you really need the item. This is a great tactic for avoiding impulse purchases. 90% of the time, you won’t go back to the store.
5. Opening Credit Cards at Every Store
Every store you shop at asks you to open a store credit card nowadays – but according to Eisenkraft, this isn’t a good idea. She says, “You shouldn’t be keying in your Social Security number to an in-store keypad where someone else can watch or a cyber thief can detect if nearby.” If you do want to sign-up for a store card, she advises that you do it from your home instead, via the internet or phone.
6. Not Investing Your Bonus
If you’re lucky enough to get a Christmas bonus from your employer or some money from a relative, your first reaction might be to go out and treat yourself, but Cici says you shouldn’t. “Psychologically, bonuses, especially during good times feel like ‘found money’ and the initial response is to spend it on something you want, but you’d get a much higher long-term value if you invest or pay off debts instead,” she says.
