The holidays are almost here, and that means gifts, eggnog, time with loved ones, and overall merriment. It also means that your holiday shopping is probably almost done, and you might be looking down the barrel of some Christmas-related debt. Even the most diligent holiday shoppers can fall victim to the common budget mistakes. With all of those shiny “50% OFF!” emails received, how could anyone resist?
Here are 7 holiday budget mistakes that will leave coal in your bank account. You can resist those temptations and stay on top of your holly jolly finances, once and for all.
1. Not making a gift list
You might have an idea of who you need to buy gifts for and what you might want to buy them. Get it down on paper. Without seeing it all written out and organized, holiday shopping can quickly get out of hand and leave you in the red.
2. Not planning a budget for each person on your list
Everyone feels the pressure to get the perfect gifts for their loved ones. But let’s be honest, money doesn’t equate love. You can find thoughtful, wonderful gifts for all the folks on your list for not very much money. And anything you’re looking to buy is probably going to be eligible for a money-saving deal at some point throughout the holiday season. Map out a reasonable budget for what you think you can spend on each person and stick to it.
3. Not sticking to that budget
If you don’t stick to it, you could end up spending the majority of your money on one person, and not have enough left for the others. If you find yourself going over your allotted amount for one person, adjust by cutting back somewhere else. Your holiday budget is a work in progress, and you need to revise it as you go along.
4. Not paying for gifts with cash or debit
This is a mistake that I am guilty of every year. I make a dent in my credit card debt before Christmas, and I end up using all of that remaining credit for gifts. My justification is always, “Well, if I put this on my credit card, then I’ll have extra in my account for necessities or other gifts.” And while that’s true, it’s also a major setback! Don’t make this same mistake. Plan your budget around the cash you will have available to you, and don’t touch your credit cards.
5. Not paying attention to your bank accounts
‘Tis the season for shady identity thieves. It’s also the season for tons of purchases, so make sure you’re checking your bank account and credit card accounts at least three times per week. Everyday would be better. Identity thieves are hoping you’re not paying attention to your money. If they get ahold of your personal information, they make purchases using your card numbers or by making withdrawals from your account. The more you pay attention to the purchases you’ve made and the amount of money you should have left, the easier it’ll be to spot anything fishy.
6. Not factoring in shipping costs
This year I decided to send gifts including several different items for each. A ‘gift basket’ theme, if you will, with the plan of mailing them to my loved ones who are scattered all over the country. To do that, I needed to order the individual items and have them shipped to me first. They were all smaller, budget-friendly gifts, so I was happy.
However, that also meant that once I gathered these items and packaged them for each person, I would need to ship them myself. Two hundred dollars later, my gifts were shipped and will arrive before Christmas Day, but my bank account is one giant frowny emoji. :-(
7. Not making your other financial responsibilities a top priority
“Oh I know. I’ll just spend a little less on groceries this month so I can buy that extra something for my bestie.” No. Do not think or say any such thing. You need to be realistic with your needs, and don’t try to skimp on your everyday necessities in order to buy more gifts. That’s a lose-lose situation. You’ll either end up with a growling stomach or an overdrawn bank account.
It’s not too late to correct these holiday budget mistakes. Don’t enter the new year in the red, with a sack of coal by your side. Begin 2014 in the green, with a smile. :-)