Financial Mistakes to Avoid Around the Holidays
The holiday season can be an expensive time of the year. With gifts, travel, food, and other expenses, it’s crucial to keep tabs on your holiday expenditures. Below is a list of financial mistakes to avoid this holiday season.
Avoid Credit Card Overuse
One of the easiest ways to avoid a financial burden this holiday season is to avoid relying solely on credit cards. A general rule of thumb is if you can’t afford to buy it now, don’t create a bill for yourself later. Exclusively using credit cards can also create a mountain of debt. If an unexpected or emergency expense were to occur, you may not be able to pay off this debt, leading to a potentially vicious debt cycle. Only use credit cards in moderation, and only if you can afford what you’re paying for. In that same light, it is also wise to avoid payday loans now or at any time of the year.
Don't Jump for Every Sale
With sales aplenty this holiday season, it can be easy to jump at every great deal you see. Although you may feel like you’re saving money, you may actually be spending more than you planned for. Companies and retailers are skilled at taking advantage of human psychology to pressure us into purchasing things we don’t need or want. If you see an item on sale, ask yourself if you would purchase that item if it were being sold at full price. If you had planned on purchasing said item despite its discounted price, take advantage of the bargain! Otherwise, avoid making the purchase.
Don't be a Powerhouse
While it’s a nice gesture to go the extra mile during the holiday season, it is important to avoid stretching yourself too thin. Do not volunteer your home, car, food, or other costly accommodation beyond your means. Keep in mind that you’re only one person and that holiday responsibilities in your household should not fall solely on you. Try to split these responsibilities among those living in or visiting your household to avoid overspending. If you plan on hosting people in your home this holiday season, keep in mind that your utility costs may be higher. To offset these costs and other potential holiday expenses, host a potluck! At the very least, it’s a great way to save yourself money on food.
Financially Preparing for the Holidays
Resist Splurging on Yourself
While holiday shopping, most people admit they’ve bought at least one gift for themself. Although it is relatively normal to treat yourself to a new toy or gadget, do not get carried away. Self-indulgent spending can throw a wrench in your holiday budget, leaving you to either trim your planned holiday shopping list or go into debt. One way to avoid overspending on yourself is to practice the “seven-day rule.” If you see something you like, wait seven days before making the purchase. Likely, the desire for this item will dissipate within that time. If you still would like to purchase the item, make sure that it fits within your budget before doing so.
Don't Rely on Bonuses
A staple of much of the workforce is the holiday bonus. Even so, it is crucial to avoid relying on this money for your holiday expenses. Holiday bonuses are never guaranteed, so relying on one that never comes could leave you in debt. They could also be a lesser amount than in years past, which again, could leave you trimming your holiday spending list. An unwritten rule of holiday shopping is to spend less than you’ve budgeted. If you do get that holiday bonus after all, use that money for another purpose.
It Isn't a Contest
The holiday season is not a competition. That said, don’t try to make it one by buying the flashiest gifts or making the fanciest dinners. Instead, stick to a budget to avoid collecting debt. Making this occasion a competition among friends or family also defeats the purpose of the holiday season. After all, the holidays are about spending time with those you love and creating lasting memories.
While it can be easy to get in a flurry over holiday expenditures, it is important to keep January in sight. After all, you will have bills to pay and expenses to worry about once the holiday season is over. The last thing you want is to fall into debt over the span of just a few months.
Need more guidance on how to financially prepare for the holidays? Check out 6 Ways to Shop Smart This Holiday Season from the Gulf Winds’ Save. Spend. Live. Blog.
Hunter Morrison
About Hunter Morrison
Hunter has freelanced for various print and radio publications across Northwest Florida, including The Bay Beacon, Navarre Press, Inweekly, Crestview News Bulletin, and WUWF. He was also the Editor in Chief of the University of West Florida’s student newspaper, The Voyager. In 2023, Hunter moved to Kenai, Alaska to take up a news reporting position with KDLL Public Radio. For fun, Hunter enjoys cross-country skiing, hiking, photography, thrifting, traveling, and looking for the best Thai food around.