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Don’t take a financial holiday the last two weeks of the year

The holidays are in full swing now and for many work and family life are transitioning to holiday mode as well. For your finances you can’t really take a break if you want to be financially successful.  Now is a critical time to stay focused and not make financial mistakes that can start your 2017 off in a financial crunch.
What is the biggest concern during the last two weeks?
By far, the mistake that is made most often is not following our budget and spending more by using our credit cards.  People rationalize it by telling themselves that it really won’t matter that much because it is just for a week or two.
Why is it so easy to go off course during the last two weeks?
There a couple of reasons, first it is just the festive mood of the holidays. The other, we usually have a different routine during this time; whether kids are home for the holiday or more time off from work.  This change in environment or attitude can lend itself to making poor financial choices - the poor choices we have avoided the other 50 weeks of the year.
What are some of those poor financial decisions?
People start eating out more and making more impulse buys.  This usually means depleting savings or even worse, building up a huge credit card debt. And most people stop using the smart financial habits they have developed during the course of the year.
What are some of those habits that people tend to break around the holidays?
Shopping with a list and using coupons are often abandoned during this time of year.  And the whole needs versus wants is usually not part of the discussion either. The conversation tends to be more about that it would be crazy to pass the amazing deals that are being offered.
Can the last weeks of the year be as damaging as Black Friday to Cyber Monday?
Unfortunately this time period is even more financial devastating. The reason: we can easily spend an extra $100 or more per day for this longer period of time.  Spending an extra $100 for 14 days will derail anyone’s budget or spending plan.
How can we avoid falling into the end of the year spending trap?
Make a special two week spending plan for this time of year.  Give yourself a daily spending limit and stick to it, no matter what.  And put the credit cards and store charge cards away, give them a holiday too. If you build a spending plan that includes the source of funds for this special budget, there will not be any surprises come January 1st.
Are there ways to make sure we stick to the spending limits?
Either go all cash the last two weeks or use a pre-paid debit card that has your total spending limit loaded. Both are great ways to stay in control of your spending without having to track every purchase.  If you have the discipline, you won’t need to take these drastic measures but it is critically important that you track your expenses if you are going to use your regular payment methods.

Posted: 12/15/2016 with 0 comments

Categories: Budgeting, Money Matters, Spending

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