Want a Debt Free January? Then You Need to Plan Your Holiday Spend

It can be easy to get swept up in the festive season, but don’t let the festive fun be financially ruining. Start the new year with less financial stress by budgeting for the holiday expenses.

It can be tough to tighten the financial belt at this time of year and festive spending can easily run away with you. So how can you plan your holiday spend so you don’t end up in a mountain of debt in January?

The first trick is not to treat December and January differently. You need to have a budget, know your income and expenses and budget accordingly so that you can avoid any unnecessary debt.

Budget Your Expenses

You will need to work out what you are going to spend over December and January. This list of expenses will need to include the normal items that you spend money on every month plus any extra expenses like gifts, holidays and so on. Also, don’t forget that if you have kids then you will need to factor in back to school expenses in January.

Your regular items in your monthly expenses will include car payments, home loans, utilities and insurance. These costs should be first in your budget and should be paid as soon as you can. You will also need to budget for any new year increases in school fees and medical aid, for instance.

The extras that you are budgeting for should be frugal but also realistic. This means that you shouldn’t be overspending, but it doesn’t mean that you can’t have any fun.

Manage Your Money

Once you have your budget sorted, you will need to stick to it and to do this you will need to manage your money.

Your November paycheck will need to cover your regular monthly spend in December, which will include all your debit orders as well as end of year costs like holiday spending, gifts and so on. This paycheck needs to last until the end of December.

Your December paycheck will then need to take you through January and will need to pay for all your regular expenses as well extras like back to school items.

If your employer pays your December paycheck early then it is a good idea to transfer your salary into a savings account, so you aren’t tempted to use it. Just remember to transfer the money back before your debit orders for January come off. Also, avoid the temptation to dip into your January salary to pay for December.

Say No to Overspending Prompts

Not only do you need to pay attention to your budget, you also need to think about what makes you spend more at the end of the year.

This time of the year is where retailers bombard you with specials and discounts, but these are not once in a lifetime offers. Unless there is a deal on something that you were already going to buy and have budgeted for then rather avoid the sales.

Another trigger could be social pressure and tradition. We might put pressure on ourselves to do things the way they have always been done regardless of the cost, but if tradition costs too much then maybe its time for tradition to change. Social pressure is where we think we have to get certain items that maybe others have and so on. But you don’t need to keep up with them, just be happy with what you have and don’t feel the pressure to spend more money on things like gifts because that is what others are doing.

Keep to Your Budget 

Sticking to a budget can be difficult, but here are some tips that can help.

  • Leave your credit cards at home and only use cash to buy things. This will help you to watch what you spend and not to overspend as you can only spend the cash that you have.
  • You can set limits on your credit and debit cards. You will then only have a certain amount to spend, which can help you to avoid overspending.
  • If you have any reward points saved up, then this is the time to use them.
  • Before you hit the shops, you should have a list and stick to it.
  • Check your budget regularly and tick items off as you pay for them.

When it comes to budgeting it does require discipline and may require some cutbacks. Once you have a budget that works for you then stick to it. However, not everything goes to plan, especially around the Christmas season, so if you are finding finances tough you can opt for a personal loan for your Christmas spending. If you do this though, you need to ensure that you can afford the monthly repayments and can comfortably put these repayments in your budget. The interest rate on a personal loan is usually lower than a credit card, so it might be a good idea to take a Christmas personal loan to get you through this tough financial time.