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Holiday Savings

| December 20, 2015
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It’s that time of year again. The time of office parties, dinners, and the gathering of family and friends. And we can't leave out the giving and receiving of presents. Depending on your particular situation, you could end up spending hundreds or even thousands of dollars on gifts. No matter your budget, you need to prepare during the year so you don’t end up in a huge hole of debt. Here are some ways to help with your holiday spending.

Most expenses in your daily life is going to be repetitive (mortgage/rent, insurance, etc.). However, there are also expenses that come as a total surprise (car repairs, medical bills, etc.). It does not matter if the expense is planned or not, because an easy way to combat life’s expenses is a budget.

Planning for the unexpected can be as simple as setting a set dollar amount aside every month in a special place, be it a bank account or under your mattress (we do not recommend you put it there). By setting this money aside, you have a “rainy day fund” for an emergency car repair, for example.

There are, however, expected expenses that are not of everyday concern. The holidays are a primary example. Plan for these the same way you planned for the unexpected expenses. The difference is here you set an amount you are planning on spending on presents and dinners. By planning what you spend, you can budget effectively. Put a set dollar amount away per month so by holiday season you have the money in your bank account to pay for everything.

Another potential trap is purchasing everything with credit cards. Many who do this are trying to take advantage of the rewards their credit cards offer. With discipline, you can come out ahead without falling into debt. Set aside the money needed to pay your bill in full at the end of the month. You'll still get your rewards, but by paying your card off you'll save money on interest and possibly improve your credit score by carrying a lower balance.

Expenses are inevitable. It does not matter if these expenses are planned or not, you can stay ahead of the bills by budgeting. Setting money aside in a “rainy day fund” and/or a “holiday fund” is a very easy way to lessen the blow of unexpected bills or holiday spending.

Happy Holidays from everyone at CRG Financial Services!

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