Will You Be Naughty or Nice To Your Finances This Holiday Season?

‘Tis the season for fun, family, and a lot of spending. Whether you plan to spend money on holiday gifts for the family, are planning a holiday event, or like to use the holiday season as your time for contributing to worthy causes, it’s a time that has the possibility of straining your finances. Don't wake up with regret this January. Instead, follow the tips below to be a little nicer to your finances this holiday season.

Plan Ahead With a Holiday Budget

Think of everything you may spend money on this holiday season and create a budget to account for each item. This should include everything, ranging from food to stamps for your holiday cards. Start with the total amount you are comfortable spending this holiday season, then begin to earmark it for each item on your list, starting with the most important. Once you have created your budget, stick to it, as it is easy to get caught up in the holiday spirit and spend more than you anticipated.²

Watch Your Credit Card Spending

Credit cards are an easy way to make holiday purchases. They often have purchase protection, are convenient, and may even provide you with rewards for your spending. The drawback is that their convenience may make it easier to get carried away and overspend. Before you begin your holiday shopping, assess your credit card debt and try to limit new purchases to an amount that will keep you below the 30% usage on your card to keep your credit score healthy.¹

Make Your Travel Plans Sooner Rather Than Later

For many, traveling to visit family and friends is a significant expense of the holidays. The holiday season is not only one of the busiest travel seasons, but when it comes to airfare and accommodations, it is the most expensive time of year. The good news is if you are able to plan your holiday travel earlier in the year, you may be able to score some deals on airfare, accommodations, or rental cars. Booking early will also help you secure the travel dates you prefer.²

Get Creative When Entertaining

Being the host for a holiday event may come with a more significant cost than you anticipate. As with all of your holiday spending plans, it is ideal to create a budget for your events and find creative ways to make the most of that budget so you are able to entertain the way you'd like. You could plan your menu around grocery items typically on sale over the holidays or make the meal a potluck where guests bring sides or desserts. When it comes to decorating for your event, break out your crafts and see what item you are able to upscale into creative holiday decorations.²

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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Footnotes:

¹ Five Ways to Prepare Your Finances for the Holidays, Equifax, https://www.equifax.com/personal/education/personal-finance/prepare-your-finances-for-holidays/

² Let It Save: Your Ultimate Holiday Budget Plan, Moneygeek, https://www.moneygeek.com/financial-planning/resources/budgeting-for-the-holidays/