Start holiday savings now, and skip the regret later | Smart Change: Personal Finance | MCU Times

Start holiday savings now, and skip the regret later | Smart Change: Personal Finance

Melissa Lambarena

Including vacation expenses in your budget all year round is effective in avoiding debt, but it is not always possible with a limited budget or unforeseen expenses.

When this is the case, lack of a vacation spending strategy can leave you vulnerable to debt and overspending, delaying financial goals. But it is not too late to come up with a last minute plan to save money for the holidays.

The small window at the end of the year can offer some time to make money that helps prevent hangovers in holiday debt.

Adjust your holiday budget with financial goals

When deciding how much to spend during the holidays, start with your budget, suggests Jason Speciner, a Certified Financial Planner at Financial Planning Fort Collins.

“Start with how much money you are willing to spend – and able to spend – on gift giving, and then work your list into it,” he says. “Do not put the cart before the horse, and bring too much, because you, you know, have put dozens of people on your gift list,” he says.

If your debt or budget does not leave room for vacation expenses, plan to spend time with people through free vacation activities, make gifts, or save with a secret gift exchange. Set expectations early by warning people about your plans.

Adding to the debt pile during the holidays becomes expensive and takes longer to pay. Strategize how you pay off any debt, and prioritize high-interest debt first. With good credit (a FICO score of 690 or higher), a balance transfer credit card lets you move debt from a high-interest credit card to one with a lower interest rate, possibly a 0% introduction APR. There is typically a 3% to 5% fee assessed for each amount transferred. Without interest, your monthly payments are applied directly to your balance, which reduces the time it takes to pay down debt. With less than ideal credit, a debt management plan through an accredited nonprofit credit counseling agency can offer relief if you are struggling to make progress.

Use the bonus-friendly season

If you are debt free and planning to get a new credit card, look for one with a sign up bonus that can offer extra cash or rewards to cover holiday expenses. Sign-up bonuses usually offer a three-month window to meet your spending requirements, and they can be easier to reach if you charge daily and holiday expenses. A card with 0% APR on purchases can also save money on interest for some time.

Earn rewards with cash-back apps

A refund app can earn extra value on everyday purchases. It may require uploading receipts, but for Krystal Sharp, coupon coach and creator of the blog Krys the Maximizer, it’s worth it. She uses Ibotta, Fetch Rewards and other apps to earn cash back or gift cards. These apps let you add deals in-store or online from specific retailers and monetize qualified items purchased. Or you can upload a receipt to redeem certain offers. You can also earn incentives to refer other people. For more value, Sharp uses one rewards credit cards to make purchases and stack earnings.

“I try to focus a lot on how can I earn gift cards, how can I get referrals, how can I save enough in the store and use my store rewards to buy things we need for the holidays,” she says.

Depending on how much you spend, it is possible to earn $ 20 to $ 25 in a week or two with daily purchases, and that is typically enough to pay off, according to Sharp. Earnings increase over time.

4. Save with a ‘no-spend challenge’

A foolproof way to save is to refrain from making unnecessary purchases over a period of time. You can try a non-consumption month, non-consumption week or non-consumption weekends depending on your preferences. The money saved can offset potential costs during the holidays.

For Courtney Clarke, a New York-based content creator on TheLifeOfCo YouTube channel, a “no-spend November” helped her keep track of her debt goals by 2020. For a month, she spent only on essential things, avoiding eating out and activities that cost money.

“I certainly can’t say I was perfect in the matter, but it’s just a nice reset to retrain your brain,” Clarke says. “It’s just to make sure you’re trying to get the best out of it.”

She admits to spending on eating out when there was not enough time to prepare a meal, but even after weighing occasionally, she still saved over $ 300 that month.

5. Get a page congestion

Make money towards the holidays by picking up a side job now or tidying up your home. When it comes to concerts, there are many flexible side jobs to be performed in your spare time, from equestrian sharing to delivery. Or if you prefer to save time, you can sell these dust collectors in your closet for shipping stores.

“I sold a lot of things to Plato’s closet and Once Upon a Child to get rid of it,” Sharp says. She estimates she is on average around $ 50 per. Travel or $ 200 to $ 300 a year.

This article was written by NerdWallet and was originally published by The Associated Press.

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