With the holiday season approaching, it’s important to consider ways to save money and not create new debt. Developing some type of spending plan is essential. Be smart about your spending. Below is a list of 10 things that can help lead you to financial success this holiday season.
1. Spend less than you earn. Keep a budget or spending plan and track your spending to avoid overspending.
2. Have a plan. Get organized and write down your immediate, short-term, intermediate, and long-term financial goals. This can be your roadmap to stay on track. Remember, if you don’t have a plan, you are more likely not to reach a goal.
3. Prepare for expected events. Save in advance for upcoming seasonal events. Holiday seasons will come and go, but the financial obligations will remain. Make sure your bills are paid on time. This will help to improve your credit score.
4. Prepare for unexpected events. Due to seasonal and holiday excitement, it’s easy to overspend. Make an effort to put some money aside for emergencies. You never know what can happen suddenly such as job loss, sickness, etc. A great way to do this is by saving any lump sum payments or windfalls such as tax refunds, gifts, or inheritance. Another way to be prepared for the unexpected is to have adequate health, car, home, and life insurance.
5. Always know your interest rates and know how your interest is calculated. Be aware of the purchase savings in exchange for a store credit card. This is where customers are offered a certain percentage off their purchase in exchange for having their credit checked to see if they qualify for a store credit card. Keep in mind that each time an inquiry is made concerning your credit, your credit score drops by a few points whether approved or disapproved. Never exceed 13 percent interest on loans and always know what you pay in interest and other fees.
6. Keep a healthy credit report. Your credit score is a number that indicates if you have good credit history. You can improve your credit score by paying your bills on time and by paying off debt. Don’t apply for credit cards frequently. Pay off your balances each month or pay more than the minimum payment. Remember, the goal is to pay off the principal balance as soon as possible to avoid paying a lot of money in interest. Don’t forget that you are entitled to a free annual credit report at www.annualcreditreport.com. You can also access this report by calling 1-877-322-8228 or by mailing an inquiry to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
7. Avoid waste. Prepare your holiday meals instead of eating out or having them catered. Don’t purchase unnecessary items and return or regift items that you won’t use.
8. Take advantage of tax breaks. Tax season begins every new year. Most people have earned income credit they can claim. To save money, if you qualify (earn up to $55,000), try utilizing the local free Volunteer Income Tax Assistance program (VITA) in your county or a neighboring county.
9. Fill in the financial gaps. If you are having financial difficulties, try having a garage sale or sell excess produce at a farmer’s market. You can try to barter goods and services. Also, you can sell on eBay, recycle, get a part-time job, etc.
10. Give back to your community.
Feel free to donate. Some ideas for tax write offs include donations to Alabama 4-H, Angel Tree, United Way, Salvation Army, a food bank, or any other non-profit organization of your choice.
AmericanSaves.org is a great resource for those wanting to learn more about financial planning. For more information, contact Theresa Jones, an Alabama Extension resource management regional agent, at firstname.lastname@example.org or 256-509-5908.
For more information on this topic and many others, contact your local Blount County Extension Office at 205-274-2129 or by email at email@example.com. You can also find us on Facebook at Blount County-Alabama Extension.