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Financial discipline is hard enough – but even more so during the holidays. From gift shopping, socializing, to food preparations, most (if not all) events and activities will involve some form of expense around this time of year.
If you’re not careful, you could be looking at an empty bank account come January. Honestly, that’s not a very nice start to a new year. Whether you’re done with shopping or not, here are four practical tips to steer you into financial discipline for the holidays.
4 Easy Tips for Financial Discipline During The Holiday Season
1.) Create different budgets.
Let’s be honest – it’s NOT easy to stick to a budget, no matter how many times you tell yourself you will. The various sales, discounts, and promotions are great distractions. You could just be aiming for stuffed toys for your niece and nephews, but get sidetracked by that 10 percent off on blue jeans.
Family parties are no exemption. Food can be just as costly as gifts. From that holiday ham to booze, before you know it, you’ve racked up hundreds of dollars of food. Practice financial discipline for the holidays by separating your budgets.
Try setting aside a different budget for food, another one for gifts, and one more for miscellaneous but needed expenses (e.g. gas for car trips to the store, snacks in between shopping, money for social events, etc.).
Divide your budget based on what YOU and your family needs. The more specific you are, the more you can see where your money goes.
2.) Use tech to track budgets and spending.
Separating budgets too complicated? Don’t worry – there’s an app for that. Take advantage of technology by letting your choice of mobile app help with financial discipline.
Clarity Money (available for Android and iOS) for example, can help you save money by cancelling unwanted subscriptions, creating a savings account, and keeping track of your monthly spending. Think of Mint, but more streamlined.
Another great example is PocketGuard (also offered for Android and iOS). This will help you compare spending habits, establish savings goals, and see exactly how much is available for you to spend.
3.) Use cash whenever possible.
Cards and money transfers can often lead you to believe that you have more than you actually have. So whenever possible, why not use cash instead?
You don’t need to use it ALL the time and for all your purchases. Rather, you can simply choose a category in your budget (preferably one where you overspend) and carry cash for those buys.
For instance: if you tend to get carried away with grocery shopping for holiday food, try carrying cash so you’re not tempted to buy unnecessary items you won’t be eating or cooking (like foreign cheese).
In one study, it was observed that people who used cash not only became more frugal, but were also happier with what they bought. There really is something to be said about seeing where your money goes – literally!
4.) Pause before you purchase.
With the holidays just around the corner, most folks choose to do their shopping online. While it makes things more convenient, you’re also prone to overspending.
But here’s an easy and quick tip to prevent going into the red: before hitting the check out button, why not put everything into your wish list first?
This does two things. First, it helps you pause and think about whether you truly want the items or not. Second, you can analyze your purchases and pick the ones you want out of the cart. You can apply the same thing when shopping at a store.
Put impulse buys into your cart, but before heading to the cashier, stop and look at the items you’ve put in. Is there anything in there you don’t need? Do you need all those towels because they’re 15 percent off? How about five pairs of socks? To whom will you give them and do you really need that many?
If you feel that you’ll be justifying your purchases, bring a level-headed friend with you. They can help bring things into perspective – AND toss away unnecessary items from your cart.
Financial discipline is particularly hard around the holiday season – but it’s NOT impossible. With a couple of tweaks to your habits, you can make your budget go a long way. Take advantage of apps, a good friend, and the Web for less stress and a merrier time.