How to get in the holiday spirit without breaking the bank
Rebuilding credit often requires sticking to a budget for a prolonged period. Now that the holiday season is upon us, the task of staying on track financially can be more difficult than ever. However, as anyone who has ever overcome financial challenges can attest, it’s easier to stay out of debt that it is to get out of debt. Taking care now to avoid the temptation of overspending at this time of year can help you design your way forward to a better relationship with credit next year.
Learning to enjoy the holidays without overspending isn’t easy, but with a few small changes in your holiday shopping habits, you can still enjoy the season of giving without going overboard.
Bring responsible spending home for the holidays
One of the more costly habits to break for the holidays is the tendency to leave shopping and home preparation to the last minute. Careful planning can take some of the stress out of the season, and it can save money at the same time. Not sure where to start when building a plan for responsible spending over the holidays? See if these tips can be adapted to suit your personal circumstances.
Think carefully about holiday travel plans. Time with family and friends over the holiday season is important to many people. Not coincidentally, it is also one of the busiest and most expensive times of the year to travel. That said, small adjustments to your travel dates can make a big difference in the cost. For example, December 22 is expected to be the most expensive day to fly this year, with airfares as much as 40% higher than average. If your holiday plans allow, check for a difference in price on different dates before you book.
Use credit cards wisely. It’s easy – maybe a little too easy – to treat the holiday spending done on a credit card as “out of sight, out of mind,” but it’s just prolonging the inevitable. Whenever possible, put together – and try and stick to – a budget to avoid unpleasant surprises in January. And, if you are paying by credit card, consider choosing a card like the Home Trust Preferred Visa* that offers 1% cash back on all eligible purchases. That way, you can start the new year with a little something extra to pay your bills.
Make a shopping list and stick to it! If you develop a list of what gifts you want to buy and for whom, you can cross off items on that list and minimize the risk of impulse purchases. According to a recent Ipsos poll, 40% of Canadians went over budget during the holiday season, but having a plan can reduce the risk if you take the time to make a holiday shopping plan. You might even still have enough time to qualify for free shipping on online orders so you can sidestep the trip to a busy mall and all the temptation that comes with it.
Consider putting gift cards to good use. According to a MarketWatch report out of the U.S., approximately a billion dollars’ worth of gift cards goes unused every year. If you are holding on to a stash of gift cards in a drawer somewhere, why not put their value towards your holiday shopping this year? You can either do your shopping at the stores you have gift cards for or exchange them for cash at a card-swapping site.
Rebuild credit with responsible spending
Whether you’re trying to save for the future or to reduce your debt load, developing and maintaining responsible spending habits is crucial. If your goal is to rebuild your credit, a secured credit card* can provide you with the convenience and flexibility of a credit card while helping to build your credit score. Because the card balance is backed up by a deposit, even those who are recovering from bankruptcy or a consumer proposal may be approved.
The road to financial wellness, or back to it, can be challenging. However, by taking the time to plan for responsible holiday spending, you will be off to a good start. Visit our website to learn more about how to build or rebuild your credit score with a secured credit card.
*Home Trust’s Secured Visa is not available in Quebec.
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