Avoid These Year-End Financial Mistakes
The end of the year can be a stressful time financially, with costs for gifts, parties, travel and holiday food really adding up. And with all these obligations, it’s easy to overspend and regret it later when your credit card bills arrive in January. This year, change the narrative and be proactive so you can enjoy your vacation without worrying about money.
Don’t waste your money on an expensive trip
Last-minute travel plans can be devastating to your bank account. If you’re thinking about using spring or summer break as a gift, wait a few weeks to actually book those tickets. As a general rule, it’s best to book your trip about two months in advance .
If you need to travel at the last minute, you can get better deals by being flexible. Be open to all airlines, connecting flights, less desirable departure times and layovers, and consider flying to or from nearby airports that may offer cheaper options.
Don’t spend too much money on holiday gifts
It’s easy to get caught up in spending on gifts, especially if you have a large family or a particularly generous group of friends. If you’ve been putting off shopping before, I know how easy it is to spend money impulsively when you’re pressed for time or caught up in the decorations and music in stores.
Set a realistic holiday gift budget in advance and be sure to stick to it. Consider physically writing down the specific items you want to buy before you buy them, and don’t deviate from those items. This is the time of year to treat yourself, but make sure you think about it.
Don’t Rely on Credit Cards
It’s tempting to think you’ll pay off your credit cards in January after the holidays, but unexpected expenses often crop up, making it difficult. Then you’ll be stuck paying high interest rates, which will hurt your credit score. Set a realistic vacation budget, using cash or money already in your bank account instead. Prioritize what is most important to you.
Be Strategic About Charitable Giving
First things first: Of course, you should donate to charity. I’m not Scrooge McDuck here. But while giving to charity is admirable, make sure it fits into your overall financial plan. Donating valuable assets (like stocks) can have greater tax advantages than putting money into a basket.
Bottom line
Listen, it’s the holidays. If you’re overspending, hopefully it’s with the people you love. I can’t advocate maxing out your credit cards in the name of the holiday spirit, but allow yourself to treat yourself and enjoy the fun this year. As long as you’re proactive with your budget, you won’t overdo it. I hope you’ll thank yourself in January by starting the new year on purpose, without holiday debt dragging you down.