Look, it seems too early to even think about the winter holidays. They are weeks away, so you have plenty of time to think about booking your travel plans and shopping for gifts, right? Technically, this is true, but waiting until the very last minute comes with financial consequences.
The Problem with Waiting Until the Last Minute
The longer that you wait to consider the upcoming holidays, the less money you’ll have set aside for holiday spending. You might have no reserved savings for getting presents, decorations or even travel tickets to visit relatives. You might only have your usual paycheck to cover these extra expenses, all while managing your budgetary needs like your bills and your groceries.
Draining Your Paycheck
Trying to manage your usual budget and your holiday expenses can lead to some stressful financial problems.
You could drain your paycheck long before your next payday, which will force you to scrimp and save every single dollar during a notoriously expensive time of year. You could put your checking account into overdraft and accumulate a variety of expensive fees, like overdraft fees, extended overdraft fees and NSF fees. You might run out of funds for your bills, which means the payments be late and you’ll be charged late penalties. Or you could rack up a serious credit card bill that you will have to work very hard to pay down in the New Year.
Vulnerable to Surprise Expenses
At the very least, your overspending for the holidays will make you completely vulnerable to any emergency expense. If your car needs to be brought to the mechanic for repairs, you might not have enough funds to cover the bill. If one of your water pipes freezes, you might not be able to afford to pay a plumber to thaw it for you.
You can’t ignore an emergency expense. You’ll have to cover it somehow, even with a drained checking account or a steep credit card balance. If your options are slim, you could try to apply for a personal loan. With an approved loan, you could have enough funds to handle your emergency right away and then focus your attention on the loan’s repayment plan once the holidays are over.
Obviously, personal loans are only there to help you deal with financial curveballs like frozen water pipes and car repairs. They are not meant to be used in non-emergencies. So, do not apply for one if you simply want to finance your holiday shopping.
How Can You Save Up Beforehand?
Investigate your personal budget and see where you can find opportunities to save. If you don’t follow a personal budget, then you should build one immediately. Download one of the best budgeting apps on your computer or smartphone and follow the step-by-step instructions to create a standard monthly budget. Then, go through your expense categories to see what can be shrunk down or eliminated entirely.
These are some ways that you can shrink your monthly expenses and collect savings for the holidays:
- Cancel subscriptions and memberships that you don’t use anymore. For example, if you have an online streaming service that you rarely visit, you should drop it from your budget.
- Move your subscriptions to a lower tier. If you are using a premium subscription service, see whether you can drop down to a tier to put some more money in your pocket.
- Negotiate with bill providers in hopes of getting lower rates. You can do this with your cell phone, cable, internet and home security companies.
- Stop taking rideshares to get from Point A to Point B. If you can walk, take public transit or carpool to get to the location instead, do that.
- Focus on making food and drinks at home. Until the holidays arrive, you should skip the fast food orders from the drive-thru and the daily coffees from the café.
The holidays are going to be here sooner than you think. So, save yourself the financial trouble and start saving up for them now.