Financially Speaking

The first gift you unwrap this Christmas season is one you should give yourself – a realistic Christmas budget that will keep you from overspending and getting hit with an avalanche of hard-to-pay bills long after the ‘spirit of the season’ has worn off and fiscal realities have returned. So, here are a few shopping a budgeting tips to help you enjoy the season and the debt-free months that follow.

Reduce Christmas costs by stretching your budget

• Spend smart – Make a list that matches your budget and stick to it. For next year, start early and shop through the year when it’s easier to make the most budget-conscious decisions.
• Be ‘crafty’ – Give ‘from the heart’ gifts like scrapbooks, recipe books or photo albums. Use newspapers or cheaper brown paper instead of expensive wrapping paper and string or yarn instead of ribbon. Reuse wrapping paper and gift bags from gifts given to you.
• Seek out discounts – Look for money-off gift options from WagJag, Groupon and other coupon discounters. And don’t forget to check out discounted merchandise and limited time offers at your retailers of choice.
• Combine to save – Instead of buying individual presents for everyone in your family, get one present they can use together. Or join with another family member to purchase ‘combined’ gifts.
• Limit ‘after-Christmas costs’ by using credit wisely

Here’s the real cost of a $200 gift when you pay for it with a credit card instead of cash: If the annual interest rate on your credit card is 22% and you make the minimum payment of $10 each month, it will take you 26 months to pay off the debt and your total cost will be $251.43. That’s why you should:

• Avoid impulse buys and credit card use Don’t take cash advances on your credit card because you’ll be charged interest from the day you take the advance until the day you pay off the entire amount. If you are using your cards pay them off fast and try to use cards that offer reward points that can reduce the cost of gift purchases.
• Make payments as soon as you can Interest is charged daily so reduce your costs by paying promptly and always try to pay more than the minimum amount owing. If your balance is growing, stop using your credit card until you get that balance under control.

It’s time to unwrap your personal Christmas budget combined with the right long-term financial plan. Talk to your professional advisor to find out how you can unwrap the precious gift of debt freedom and financial security.