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Avoid A Holiday Spending Cash Crunch

True story. I was in a store recently and couldn’t find the Halloween-themed section. However, the whole store was covered top to bottom in Christmas decor! It was on every end cap and filled row upon row of the store’s retail space. I asked an associate for help and they pointed me to a two-foot area that held the remnants of a Halloween display. How is this possible? There were still two weeks left in October! It is a healthy reminder that, like it or not, the holidays are upon us.

Over the course of the next two months,  people will begin making their holiday purchases and planning for the upcoming season. How can we avoid draining our hard-earned savings and derailing our budget this season? Here are a few suggestions to think about as you begin your holiday spending.

Plan ahead for spending during the holidays.

Take a serious look at your finances. Determine the amount you have to spend over the next two months, outside of your normal budget. It can also be helpful to outline additional expenses, such as listing all the people you’ll be purchasing gifts for, the cost of holiday cards, stamps, decorations, charity donations, etc. Having it all laid out allows you to better forecast your holiday priorities. From here, research the price of each item and lay out a plan. If you don’t have the funds for a 20-foot tree and all the trimmings, cut back. If you can’t afford to purchase a gift for every single person you have ever met, cut back. Figure out what works best within your personal budget. This is the season of giving, but it is also the season of joy. Don’t let finances pull the joy from your holiday.

Avoid the impulse buy!

At every store you enter, they have rows of grab-and-go items lining the registers. This is to promote the impulse purchase – the last minute “gotta have it” before you check out and leave the store. Before shopping, make a list of exactly what you are looking for and what you NEED. Then, stick to the list! At the holidays, it is best to plan out all purchases so you can stick to your budget. This is even harder with the convenience of online shopping where you can easily click everything into your cart. Be strong. You don’t really need the Santa that sings and dances! Stick to your list of pre-researched gifts that fit in your budget.

Don’t wait until the last minute.

Waiting until the last minute means we will probably make hasty purchasing decisions. At crunch time, we will buy just about anything, just so we have a gift to give someone. Most times this means we don’t get a great gift and we pay too much for what we are getting. By planning ahead and purchasing gifts early we can control what we buy and what we are spending during the holidays.

Be creative.

Don’t have enough cash to buy high-tech gadgets for the family this year? Try giving a homemade present or offering your time instead of a physical gift. It really is the thought that counts and people will appreciate you going out of your way to do something for them.

Look for alternatives.

You worked hard all year and you’re looking forward to that holiday bonus at work. If you could just access the money now to jumpstart your holiday shopping list! There are some ways to span the gap until that payday. Look for lending options to help you get the funds you need, but keep an eye on the repayment options and make sure you’ll be able to afford the additional bill after the holiday rush.

A personal line of credit, small personal loan, or even a credit card may help get you through the next couple months, until you have access to the funds to pay back the outstanding balance but you should avoid borrowing if you’re not certain how it will impact your budget. You don’t want holiday spending to take you into debt now and start 2021 off on the wrong foot.

Start saving now for next year!

If you are disappointed by the amount you have available for holiday spending, NOW is a great time to think about next year. The best answer is to open a Christmas Club Account to save for the holidays in 2021. Putting aside a little extra cash throughout the year is easier than coming up with a lump sum at the end of the year.

Spending during the holidays can seem unavoidable, if you need help coming up with a budget or want to open an account for next year, feel free to stop by your local branch to meet with a friendly Keystone Banker today! Tell us your best tips for saving money during the holidays in the comment section below!

Written by Teresa Sterner

Teresa is the Marketing Manager for First Keystone Community Bank. Her experience in Customer Service, Marketing and knowledge of our products and services allow her to share valuable information with our customers.

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October 28, 2020

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