Does this sound familiar?
It’s January, and it’s cold. You’re already dreaming of summer vacation on the beach. Then, reality hits. The first credit card bill of the new year. Yeah, it was nice to give so many thoughtful gifts, but ultimately, it will take most of this year to pay off last year’s Christmas. Saving for summer vacation might not be so easy after all.
So, how can this year be different?
Create a Budget and Stick to it
So, even though it’s not the holidays, now is a great time to plan for discretionary expenses like birthdays, weekend getaways, and holiday gift buying. If you know what to expect now, you won’t be surprised next January when the bills roll in. Even better, you can budget and save throughout the year to cover your gift and leisure purchases so there doesn’t have to be a giant credit bill next January!
Reviewing our past spending can be a good starting point in creating a budget for the upcoming year and all its birthdays and holidays that lie ahead.
- Write down the amount that you think you can afford this year (plus or minus $100.00 for the best and worst case scenarios).
- Next, make a list of people and write down the gift you would like to give them. This may prevent you from buying impulse gifts that may stretch or exceed your budget.
Search for the Best Deals
Price comparison can be a useful tool in finding the best deals. Remember that sales are not always legitimate; some merchants advertise just to entice customers to come into their stores.
- When purchasing from a sale, remember to save your receipt. Many merchants will credit you with the difference in price if you find the same item for a lesser price from a competitor.
Check Merchant Refund and Return Policies
Refund and return policies can vary from store to store. Also keep in mind that refund and return policies for sale items can be different from standard store policies, especially if the item is declared as a “clearance.”
- Ask the merchant about their refund and return policies before making your purchase. Obtaining a refund or return without a store receipt is often difficult, so save yourself a headache and hold onto your receipts and other proof of purchases.
Paying for your Purchases
Paying with cash can be helpful in controlling your expenses regarding your budget. However, carrying cash around malls and stores is dangerous, especially if you decide to do all your shopping on the same day. Shopping can be strenuous, and shoppers could easily lose their concentration and misplace their wallets or fall victims to thievery.
Using major or merchant credit cards is another efficient way to pay for your holiday purchases. However, you have to be cautious and use credit cards as a loan and remind yourself that credit is never free.
Debit cards are a much safer option for consumers who do not want to pay high credit card interest rates. When using debit cards, shoppers have to be careful not to exceed their balances. Doing so may result in overdraft penalties that can range from $ 20.00 – $40.00 depending on the lending institute.
You should never consider applying for a secured loan or a new credit card for your holiday purchases.