By: Nicole M. Llinás Leduc, Esq., MPHE, CHES®, Coordinator of Health Management
The arrival of the Christmas season brings along many emotions, especially happiness and joy in celebrating and spending time with family. However, this season can also cause financial worries and stress.
Aware that Christmas can be particularly challenging, we share with you 5 recommendations to have a financially healthy season.
1. Establish a budget for the season
The first step is to establish a clear budget for expenses, taking into account gifts, decorations, food, entertainment, festive attire, etc. Remember to include your fixed monthly expenses, such as mortgage payments, personal or car loans, internet, electricity, water, etc.
2. Make a gift list
Make a list of the people you want to give gifts to and assign a budget to each one. Consider inexpensive yet meaningful gifts, such as home-made items, which add a personalized and sentimental touch.
3. Smart and strategic shopping
Before making a purchase, compare prices between different stores and modes (online versus in-store). Take advantage of sales and discounts, including Black Friday and Cyber Monday sales, to obtain the best prices.
Avoid compulsive purchases and try to keep your expenses within what you established in your budget and gift list.
4. Avoid credit card debt
Try to stay within your established budget, but if you use a credit card, make sure you can pay the full balance in order to avoid high interest payments.
Keep your credit card debt at or below 30% of the credit limit so as to avoid negatively impacting your credit score.
5. Never use your savings!
The money that you worked so hard to save shouldn’t be used on expenses, unless it is an investment or something of vital importance –like health expenses, unexpected emergencies, and similar.
Like Carolina Segunda mentions in her finance blog on Bonanza, “Savings are for debt relief or to create new sources of income, but never to spend on material goods, such as Christmas shopping.”
You can also get started on a savings plan for next year, often known as a Christmas Club. Set aside a fixed amount of money every time you receive your income and put it into a Christmas shopping fund to help you reduce the stress caused by this season.
There is no reason why Christmas should represent a time of financial stress. Preparing in advance can make a significant difference to help you enjoy a debt-free Christmas season with your loved ones. We recommend following these tips to help you keep your finances healthy during Christmas so you can focus on spending time and celebrating with your loved ones.
