For Mark Roberts’ Use: Not to provoke anxiety, but have you started your holiday shopping yet? And have you set a spending limit?
According to a recent Bankrate poll, 56 percent of respondents plan to avoid going into debt this holiday season. And about half (52 percent) plan to keep their budget in line with last year’s spending. Only 13 percent said they would spend more this year, and 22 percent plan to spend less!
It sounds like a lot of you are making some wise shopping decisions this year. These tips can also help you rein in the spending, so that you don’t overextend your budget.
Make a list (and check it twice). Make a list of every item you need to purchase, and don’t buy anything that isn’t on the list.
Check sales advertisements before leaving the house. Learn where you can score the best deals on the items you need, and plan your shopping trips accordingly. Try to visit the fewest stores possible, and avoid window shopping.
Bring cash (mostly). Psychologists have studied this issue, and have concluded that we tend to overspend when we’re using credit cards. It’s pretty easy to see why: Swiping the plastic doesn’t “feel real”, and you know you don’t have to pay the bill until later. It’s much harder to hand over cash, which will keep you from overspending.
Use credit wisely. There are two exceptions to the “bring cash” rule: You probably don’t want to walk around with a large amount of cash in your wallet, so use a card for big-ticket items. And if you discover a problem with the item later on, your card’s purchase protection features might help you out.
Don’t get lured in by rewards programs. The busy holiday season is no time to open new credit card accounts. Assuming you maintain a handful of cards for credit building purposes, there is no point to opening new accounts. The rewards might sound nice, but you won’t actually save money if you charge more than you can pay off this month. Plus, opening several new accounts in one month can actually hurt your credit score.
If you have any other questions about financial planning, don’t delay. Set aside time for an appointment, and we can help you plan for both the short term and long term.