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Howe & Rusling Wealth Management

Helpful Tips from H&R: 3 Financial Tips for the Holidays

Mary Grace Paoletti, CPA, Financial Planner

3 Financial Tips for the Holidays

With the most wonderful time of the year upon us, it is easy to get caught up in both the stress and excitement of holiday shopping. When searching for gifts, decorations, and other festive items, keep these helpful tips in mind to ensure that your spending doesn’t become more than you can handle.

1. Make a List, and Check it Twice (Budget)

Visual tools can be immensely helpful when attempting to accomplish any task, but especially shopping. Getting an estimate of how many gifts you would like to buy, and what each of them will cost, will allow you to see an approximate total so that you are not left with sticker-shock and buyer’s remorse at the end of the season. Don’t forget to include costs such as wrapping supplies, cards, and postage. While these expenses are minimal, they can certainly add up. If you plan on hosting friends and family for a gathering this year, be sure to keep that in mind as well. Asking each guest to bring a dish to pass can be a useful tool in mitigating the cost.

2. Let Credit Cards Work for You, Not Against You

Credit cards offer a multitude of benefits such as ease, convenience, rewards, and more. When taking advantage of these perks, it is important to be realistic about what you are truly able to spend. While your credit limit may be $6,500, that doesn’t necessarily mean that’s what you can afford to spend, especially if you already have credit card debt. Keep in mind that lenders like to see a total debt-to-credit ratio at or below 30%. Meaning, the amount of credit you utilize should be 30% or less than what is available to you. Even without debt, overspending can negatively impact your credit score, and make it so that your holiday spending could come back to haunt you in the new year. In an effort to avoid this, never charge more to your credit card than what you currently have in your bank account.

Most credit card companies offer some sort of rewards program, so make sure you are getting the most out of your available perks. Discover, for example, allows their users to cash in rewards for gift cards or e-Certificates, and each one comes with an added bonus! Meaning, you can use $40 of rewards to purchase a $45 gift card, and the higher the value the more of an added bonus you get. Frequent Amazon shoppers can benefit from holding the Amazon credit card, which gives you 5% back in rewards for all purchases made through their site. Regardless of the credit card used, the holidays can be a great time to use up any rewards you have built up throughout the year!

3. Take Advantage of Deals

Thrifty shoppers should also keep an eye out for Black Friday deals which are already happening. Typically, these deals are offered at a majority of stores the day after Thanksgiving, but many big retailers offer early deals. Keep an eye out at your favorite places and lock these savings in early. Similarly, Cyber Monday is normally the Monday after Thanksgiving, but usually extends out for that entire week. Traditionally, Black Friday was for in-store shoppers and Cyber Monday was online-only, but in recent years these lines have been blurred, and the deals for both events have been offered on both platforms. A newer, more modern shopping holiday is National Free Shipping Day, which will benefit those of us who prefer to skip the lines and shop virtually. This holiday came about in 2008 as a way to stimulate online shopping around mid-December, when online sales would tend to slump. Hundreds of stores participate, and not only grant you free shipping, but guarantee that your items arrive by Christmas Eve. Free Shipping Day will take place this year on Wednesday, December 14th, so don’t miss out!

While it’s easy to let the pressure of the holiday season influence your spending, remember that it’s the thought—not the dollar value—that really matters. Cherish your time with loved ones and have a happy holiday season!

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