Alicia Nelson-Bell, Empowering Financial Wellness Program Coordinator
It’s Christmas in July! Yep. You heard me right! You may be thinking to yourself, “How can I be thinking about the holidays right now when my budget is already being squeezed so tight"? But really, it's a good reason to start thinking about a plan for holiday spending sooner than later this year. Creating a plan and being a bit more prepared financially will pay off big time.
Why the friendly reminder?
In the 3rd quarter of 2021, AKA when most people did their holiday shopping, Americans added over $74 billion to credit card balances. Over 80% of those who put holiday expenses on their credit card carry a balance for an average of 3 months after the holidays and are paying an average of 18% interest. This makes those “good deals” you scored not so great when you pay 18% or more interest on them for multiple months!
What can YOU do?
If you haven’t already done so, start saving up for your holiday budget, so you are prepared for the holiday travels, festivities, food, and gift-giving without having to put it all on a credit card!
A revolving savings account is a great way to save up these funds. Either look back on how much money you spent last year on the holidays or look at the different holiday expenses and set a per-person amount that you feel is realistic for your household to stick to. Add it all up and divide it by the number of months or paychecks left until the holidays. Either automate a transfer to go into a specific savings account each month or paycheck, or set yourself a reminder on your calendar to go online or into your bank and transfer this money yourself. We recommend automating it, so you don’t even have to think about it or take time to do anything after the initial set up.
Your January Self Will Thank You
Saving up for the holidays on a monthly basis can save you stress and money when the holidays come. This can help the holidays to feel less like an emergency, that you dip into your emergency fund for. We know when the holidays are, so let’s prepare for them and make them more enjoyable and less stressful! Trust me, you’ll thank us later for this friendly reminder.
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