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…
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 to 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.
Want to know the easiest way to save for Christmas throughout the year? Well, I’ll share the strategy that has worked for me for years. Simply open an account with Capital One 360 and set up automatic contributions to your Christmas fund per paycheck. If you open a savings account with at least $250, they’ll even give you an extra $25 to boost your savings! Open your account today!
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:
- Create a holiday budget.
- Save throughout the year for Christmas.
- Get organized.
- Remember Black Friday deals are not always the best deal.
- Forget about store credit cards.
- Get rid of unrealistic holiday expectations.
- 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?