6 Smart Financial Habits for the Holidays

It’s that time of year again! No matter how carefully you’ve planned and budgeted in the past, there’s always the temptation to overspend during the holiday season. A festive mood (and a bit of social pressure) can push even the strongest among us to whip out the credit card one too many times.

Here are 6 helpful holiday habits to follow this holiday season:

Count your cards. Once you start shopping, it can be tempting to take advantage of in-store offers that encourage you to use a particular credit card. However, if you lose track of which cards you’re using, you could face surprising bills next month. Not to mention, if you can’t pay off your purchases within a month, that “discount” wasn’t really worth it, anyway.

Check your available credit. Once you’re approaching the credit limit on a card, your credit score will be negatively impacted. Consider this when deciding which cards to use. If you’re close to the limit on most of your cards, that’s probably a sign that you’ve been overspending your budget.

Research rewards. If you do plan to use a credit card for your holiday shopping, research rewards programs to decide which card(s) offer the best deals. You might as well take advantage of any rewards programs for which you qualify, assuming of course that you can pay off the balance within a month.

Use a card with a good protection plan. If you’re ordering an expensive item online, or shipping something across the country, then using a card with protection benefits makes sense. Often these benefits will cover theft and fraud activity, making your purchases safer.

Create a budget, and stick to it. Make a shopping list before leaving the house, and take only the credit or debit card(s) that you need to complete your purchases. Set a spending limit for each gift, and don’t worry too much about making things “even” among your recipients. This mindset generally just leads to more unnecessary spending.

Charge only what you can pay off next month. We’ve said it already, but it’s worth saying one more time: Don’t charge more than you can pay off within a month! The last thing you want is to spend the first half of your year paying for a shopping spree. Remember, also, that tax season begins soon after shopping season. You don’t want to doubly burden yourself.

For more help with budgeting, savings habits, or other financial matters, give us a call. We’ll be happy to answer your questions and help you create a strategy for long-term financial success.