Spending money without any budget planning in the Christmas holiday season can be dangerous and lead you to fall into the debt trap. If there is a long list of stuff that you want to buy, it is a wise step to organize them into an excel sheet and add up the total cost.
When creating a budget for your holiday expenses, you have to take into account your priority expenses for example living cost and bills. You must calculate the exact amount of bills including credit cards, loans and utility bills so that you know how much bills are due for you to pay in that month.
Taking a look at your expenditures in the excel sheet allows you to find out your spending patterns and identify the areas that cost you most money. For example, some people like to spend money on movie tickets in the weekend or buying junk food. You can minus these expenses since you don’t necessarily have to spend money on them.
Some people who don’t have finance responsibility spend without thinking whether they are going have enough money to cover their living cost or pay the bills. This forces them into a situation where they have to obtain a loan. When taking out a loan, many people would tell themselves that they will surely pay the bill in full by the due date. However, when the due date arrive, they delay the bill payment which results in the debt growing larger because of the penalty fees.
When you are late in making payment for your bills for one month, there is a tendency that you are going to be late in paying the bill for another month. This can cause you to develop a bad habit to make late payment for your credit cards bills and cause your credit score to drop more and more. It is advised that you also set aside a small portion for your savings instead of spending all the leftover money from your salary.
It is best to use cash for your holiday shopping instead of relying on the credit cards. The problem usually happen when people rely on their credit cards to do their holiday spending. You should start saving money for the holiday season starting from now onward.
To save more money, you can try cutting down unnecessary expenses. For example, instead of dining out, you can cook all your meals at home. You only need to drink water so there is no need to spend money on beverage like juices, coffee, and tea. If you are spending a lot of money on your cell phone package, you can choose a different package where you are only limited to the essential features.