Money

7 Financial Mistakes to Avoid This Holiday

October 24, 2016
Here are 7 financial mistakes to avoid this holiday so you won't begin another year broke!
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This is one of my most favorite times of the year. It always has been ; however, the reasons for it being a favorite have changed over the years.

Growing up, the Christmas holidays were my favorite because it meant I would overindulge in everything. From food, candy, gifts, giving – it was a time that my family and I usually spent more than we would earn in one month.

As soon as Black Friday came, it’s like all common sense went out the window and it was time to shop till we dropped. Of course, I’m talking about me and my mother.

Thanksgiving day would be spent reviewing multiple ads and planning shopping trips. We discussed everything from where to stop first, pit stops for food, and what each person was to purchase in certain stores with other spenders of the family.

To say we had fun was an understatement, but we avoided talking about the aftermath because it would ruin the fun that was about to be had on that special Black Friday.  From Black Friday all the way up until Christmas Eve, money would leave hands faster than we could earn it. And the day after Christmas we would wish the fun could continue; however, back to reality we went.

It was time to figure out how to manage the bills and time to go back to work. We would build up the anticipation for another three-hundred or so days until the next Black Friday came around and then do it all over again.

This cycle went on for most of my teenage years, through college, and a few years after college. It abruptly stopped when I realized I couldn’t keep up this vicious cycle and stay ahead financially.

I was grown, married, with a kid of my own and I had dreams that didn’t revolve around “America’s most expensive” time of the year.  It was important to come up with a plan so that I could enjoy the holiday’s without inching towards bankruptcy again. I had to avoid these financial mistakes this holiday and if you’re here, I’m reasoning you want to avoid them too.

So, keep reading…

 

Here are 7 financial mistakes to avoid this holiday so you won't begin another year broke!

 

7 Financial Mistakes to Avoid This Holiday

 

1) Not having a plan.

It doesn’t matter the amount of money you have to spend on the holidays if you don’t tell yourself what you’re going to do with that money – you’ll waste it.

Not having a plan is the easiest way to spend more than you thought you would. Your plan doesn’t have to be elaborate, but it should consist of the basics.

The basics should be who you’re purchasing gifts for, events you want to participate in, and your budget!

 

Related Reading: 20 Ways to Have a Debt-Free Christmas

 

2) Not budgeting for Christmas at all.

Not having a plan for Christmas leads us right into the second biggest financial mistake to avoid this holiday – not budgeting for Christmas at all.

Your holiday budget should not be funded by missing a bill so you can afford gifts for everyone. Nor should your holiday budget be funded by your credit card without the money in the bank to pay it off in full!

Your Christmas budget, however, should consist of money you set aside throughout the entire year. As soon as January comes, create a budget and add Christmas to it. Fund this part of your budget throughout the entire year so you will have the cash to pay for Christmas.

 


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Related Reading: How to Have a Debt-Free, Stress-Free Holiday Season

 

3) Being unorganized.

Next up in our financial mistakes to avoid this holiday is being unorganized.  It will do you no good to have a Christmas budget and a plan and still be unorganized

If you’ve found the perfect gift for Rudy, on sale, and you misplace it – how is that doing you any favors? What if the dress you purchased for Rudy isn’t the correct size and you can’t find the receipt?

While you’re shopping this holiday season – stay organized by keeping track of what you’re spending and who you’re spending it on. And always keep the receipts in case you need to make returns!

 

4) Thinking Black Friday deals are the best deals you can get.

I won’t lie and say you can’t score some pretty sweet deals on Black Friday. I’ve purchased my share of televisions during Black Friday and I’ve had them for years!  I don’t regret my $200 televisions because I’m still watching them!

However, some of those toys and other gimmicks they use to entice you into the store just aren’t worth it.  I purchased a $5 handheld blender from Walmart that basically told me to go to hell after trying to use it past its prime.

And of course, there is the broomstick vacuum I purchased thinking it would make cleaning more convenient. It did anything but make life easier. Let’s not forget the toys. I’ve had much better luck getting toys at clearance prices throughout the year than I’ve had on Black Friday.

 

Related Reading: 5 Things To Do Instead of Shopping This Black Friday

 

5) Opening store credit cards for extra discounts.

I’ll shamefully raise my hand and say I’ve fallen for this quite a few times. The worst part is that these discounts weren’t even worth the ding the inquiry put on my credit score. Most stores offer minuscule discounts like five or ten percent off.

Just do yourself a favor and pass on these little gimmicks. The interest rates on these credit cards are terrible and it could tempt you to spend more than you need to. You only budgeted to spend $300 for Christmas and all of a sudden you have an Old Navy card with a $400 credit limit.

That’s an extra $100 you think to yourself, except it’s not just an extra hundred.  You’ll pay interest, possible late fees, and over the limit fees if you’re not careful. Just take your $300 and buy what you’ve planned to purchase and keep your credit score and wallet intact.

 

6) Acting like you’re Bey and Jay or Kanye and Kim.

Let’s be clear folks – celebrities purchase their spouse’s houses, cars, yachts, diamonds, and furs for Christmas because they can!  Although it seems unreasonable and over the top to us doesn’t mean that it’s unreasonable for them.

Believe it or not, many of them can afford it. I can’t and that applies to many of you too.

Honestly, I don’t want a car for Christmas because I know that there ain’t no way in hell my hubby has $40,000 sitting around to pay cash for my dream car, a Range Rover. If I did receive it as a gift, I know that a car payment accompanies it. No, thank you.

Celebrities and some rich folks can pay cash for these little extravagant gifts. I cannot. And while it’s nice to look at Christmas movies and wish you can receive such extravagant things, the reality for most of us is that we cannot.

Christmas is not just about gifts and you shouldn’t have to feel like Christmas is actually Christmas unless you receive certain types of gifts. These last few years I’ve been happy with receiving absolutely nothing.

 

7) Waiting until the last minute to begin Christmas shopping.

My husband likes to wait until the week of Christmas to buy gifts. He rarely gets the bests deals; however, he is completely fine with that and I leave him be. However, I like to start shopping as early as possible.

It’s not uncommon to see me in the store on January looking at last Christmas’ markdowns. In July, I’m looking at mid-year clearance toys for my kids. And throughout the year I purchase items too.

You will not see me out during the week of Christmas trying to purchase gifts for anyone because I’m done way before then. I hate the crowds, the rude people, and the long lines. I’d rather be at home watching my favorite holiday movie and laughing about all the money I saved.

 

Avoid These Mistakes This Holiday

Let’s wrap this up and recap the 7 financial mistakes to avoid this holiday:

  1. Create a holiday budget.
  2. Save throughout the year for Christmas.
  3. Get organized.
  4. Remember Black Friday deals are not always the best deal.
  5. Forget about store credit cards.
  6. Get rid of unrealistic holiday expectations.
  7. Don’t wait until the last minute to shop.

While I’m sure that these won’t be the cure-all for some folk’s finances this year, I can assure you that avoiding these mistakes worked for me. If you’re serious about your finances and want to enjoy the holidays without the debt, make sure you take heed of these 7 financial mistakes to avoid this holiday. You won’t be sorry!

 

Are there any other financial mistakes we should avoid this holiday? Have you succumbed to any of these mistakes in your past?

 

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Latoya Scott
Writer/Creator
Latoya is a writer for hire who loves talking about budgets and money. Her mission includes paying off $79,000 in student loans and aspiring other millennials to hustle their way towards financial freedom. Her work has been featured on The Huffington Post, Rockstar Finance, and My Fab Finance.

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25 Comments

  • Reply Tia | Pennies In My Pocket October 24, 2016 at 11:02 am

    Yes, Yes and more Yes! Having a plan is essential. For the last few years, I have only bought for my niece. The holidays usually just end up being an exchange of money and I would much rather spend the time with the ones I love.
    Tia | Pennies In My Pocket recently posted…How FLBlogCon Paid Me to AttendMy Profile

    • Reply Latoya Scott October 25, 2016 at 9:52 pm

      Me too. If I do buy for people it’s usually just my mom, kids, and goddaughters.

  • Reply Kemkem October 24, 2016 at 11:17 am

    This is a great and accurate point. I was a big fan of number 5 for so many years. They entice you to open all these store credit accounts for meager savings and l always fell for it. Later on, realizing how it used to be when l was younger (family, no gifts), l stopped giving gifts all together and had my friends stop giving me gifts as well. Couldn’t be happier. No more holiday stress 🙂
    Kemkem recently posted…Rare Epic Travel Fail To See Sintra PortugalMy Profile

  • Reply Nicole October 24, 2016 at 3:02 pm

    Yes this is right on time! Budgeting is key to not breaking the bank. I’ve had to work hard on not procrastinating and doing my shopping at the last minute.
    Nicole recently posted…TBEX Philippines Travel Blog Conference ReviewMy Profile

    • Reply Latoya Scott October 25, 2016 at 9:51 pm

      Yes, shopping at the last minute always leads to stress for me so I avoid it like the plague!

  • Reply Artney | My Pretty Brown Fit October 24, 2016 at 4:05 pm

    Great list! LOL! I cracked up though because so many people really do go all out like celebrities. I’ve learned over the years, that the holiday season (especially Christmas) is not about gifts. Gifts are great, but I’d rather spend time with my family than blow my budget. I’ve also learned that I find some of my best deals AFTER Black Friday.
    Artney | My Pretty Brown Fit recently posted…CurrentlyMy Profile

    • Reply Latoya Scott October 25, 2016 at 9:51 pm

      Me too, Artney. I don’t fool with Black Friday at all anymore. I hate those crowds and people acting a fool over towels and toasters every year.

  • Reply Rachel @ The Latte Budget October 24, 2016 at 5:16 pm

    As sad as I am that you would insinuate that I am NOT, in fact, Beyonce, I agree 100% 🙂

    My family actually quit doing gifts during the holidays. We all live far apart and it was becoming difficult to transport gifts. Really, we are lucky if we are all together for the holiday and consider that a gift enough.

    I am with you that I have a hard time asking for gifts from my fiance, especially now that we are making the shift to joint finances. We try to roll our anniversary/Valentines Day/birthdays/Christmas all into one big gift for each other or buy a big experience or trip that we can do together. Works for us!
    Rachel @ The Latte Budget recently posted…6 Weekly Habits for Improved FinancesMy Profile

  • Reply Adeola Naomi October 24, 2016 at 9:12 pm

    I have a plan and budget every year and this year is not an exception !
    Thank you for great read!

    http://www.distinguisheddiva.com/2016/10/happy-non-racistnon-offensive-and-non.html
    Adeola Naomi recently posted…Happy Non Racist,Non Offensive and Non Stupid HalloweenMy Profile

  • Reply Kirstin Fuller October 24, 2016 at 10:25 pm

    A budget with specific amounts in mind for each gift is how I work it each year. Planning early is also a great tip along with starting your shopping early.
    Kirstin Fuller recently posted…I Drove A Rolls Royce Dawn!My Profile

  • Reply Michelle Malone October 24, 2016 at 10:42 pm

    Great post, LaToya! I love the common sense approach to financial freedom. Best wishes this holiday season!

  • Reply Colin | rebelwithaplan October 25, 2016 at 11:37 am

    Saving throughout the year for holiday season has been the game changer for me. Allocating the money has been such a big relief to resist the urge to spend spend spend ($$) once November hits.

  • Reply Tanya Barnett October 25, 2016 at 7:40 pm

    Acting like you’re Bey and Jay or Kanye and Kim. This made me laugh because I know folks who do this. I’m glad our kids are teens who want a few $$ and they are good.
    Tanya Barnett recently posted…I Am Great Mom! My Profile

    • Reply Latoya Scott October 25, 2016 at 9:48 pm

      Girl, it’s a mess to see all those new cars on my timeline and then folks losing that Christmas cheer when that car payment comes in the mail. I’m not having any of that, lol.

  • Reply LaQuisha Hall October 25, 2016 at 11:28 pm

    This post could not have come at a better time, lol! Being organized, which I am, has great benefits!
    LaQuisha Hall recently posted…Gone with the Wind, Fabulous!My Profile

  • Reply CJ October 26, 2016 at 1:53 am

    I’m definitely going to make it more of a habit to schedule and organize the gifts I want to get. I created an Excel spreadsheet last year with items and limits and for the most part, I stayed in line. I was so proud of myself.

  • Reply Mimi Green October 26, 2016 at 11:56 am

    I’m being smart about Christmas this year. I started in July and I pick up a thing or two each pay period and stash it away. I always have a list of wants and I add in things I want them to have.

    In years past I’ve killed my credit card and this year I’m not doing that.
    Mimi Green recently posted…The truth about the Taraji P. Henson revealed in Around the Way GirlMy Profile

    • Reply Latoya Scott October 26, 2016 at 9:42 pm

      Great idea! Kudos for starting early, Mimi!

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