Tackling Saving and Debt Ahead of the Holidays

By Lynnette Khalfani-Cox, The Money Coach® 

Now that fall is here, many people are already thinking about the holidays. That’s probably because retailers have wasted no time putting up decorations and launching sales in a bid to entice shoppers into getting their holiday shopping done early.

Well, before you go out and spend money you may or may not have, it’s a good idea to make a conscious effort to avoid getting yourself into a financial hole this year. In fact, if you want to put yourself in a better financial position in 2019, you can use this time to tackle your savings and debt issues – ahead of the winter holidays.

Here are some tips to help you get started.

Use the dollar-for-dollar challenge

Any time you purchase a gift or other holiday items, try doing the dollar-for-dollar challenge, which I also call the 1-for-1 challenge. In short, it involves putting aside an equal amount of dollars into your savings for every holiday dollar that you spend.

In other words, if you spend $100 on holiday décor, you should be prepared to put an equal $100 into your savings fund. This technique not only helps keep your current spending in check, it also boosts your nest egg for the future.

Track your spending beyond gifts

One way people get themselves into financial trouble with holiday spending is that they tend to track December purchases, or they only account for money spent on gifts. In reality, all of your holiday spending affects your budget. So you must be honest with yourself about the totality of the dollars going out the door. Taking an honest, realistic assessment of your spending means you’re paying attention to your fall purchases or the “early” holiday-related spending that you do during the months of September, October and November too.

Likewise, you’ll need to keep tabs on purchases made for things like holiday travel, decorations, holiday parties or attire purchased to attend holiday functions. Again, all of your spending counts; not just money spent on holiday gifts.

Focus on Debt Repayment

Student loans, credit card bills, car notes and mortgages are all examples of personal debts you may have. But during the fall, you should pay particular attention to your credit card debt.

After all, it’s the plastic in your wallet that is most likely to be used – or even overused – ahead of and during the holidays. So before you add to your current balances, make a plan to first knock out as much of that credit card debt as possible. If you’ve only been making minimum payments, now is a good time to pay two or three times the minimum, if you can.

Even if you double up on credit card repayments, be sure to pay all your other loan obligations on time, making at least the minimum amounts due. Doing so will protect your credit rating.

Set limits on holiday charges

It’s also wise also to have a plan on how you use your credit cards during the fall and the holiday season. For example, you might decide to use your credit cards for emergencies or for credit holiday travel. Any guidelines or criteria you establish can work, as long as you’re being intentional about keeping your debt under control.

Be smart about your credit cards

Remember that credit cards are not inherently bad. They’re simply financial tools that must be used properly. If you learn how to spend on credit wisely, and pick the right cards to use for your holiday shopping, you may very well reap significant financial rewards, like cash back, travel points, or free hotel stays. Plus, regular and responsible credit card usage helps you establish and build your credit rating – something that comes in handy should you need a loan, such as a mortgage, down the road.

 Keep going!

Saving more money and reducing debt during October, November and December are good ways to exercise your current financial muscles and build your future financial health too. But you won’t achieve long-term financial stability in just one, two or three months.

However, with patience and perseverance, and by balancing prudent saving with smart spending, your good habits developed during the fall season will soon turn into years of smart financial choices – an outcome you’ll enjoy all along the way!


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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

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