While spending money can often lead to a worrisome thought process for many of us, individuals with a bad credit score may feel this burden even more so. Typically, they are often the ones that are struggling to keep up with their bills and trying desperately not to fall further into debt.
To top it off, thinking about how you will manage to pay for huge financial purchases when you have bad credit can be a continual source of stress and anxiety. With that being said, one time of year in particular that has a long-standing history of being exceptionally financially gruelling, is ironically none other than the annual event perhaps most synonymous with happiness and cheer – you guessed it . . it’s Christmas.
One way however that many individuals do manage to make it through Christmas is to charge these purchases to their credit cards and while this can mean an enjoyable Christmas time with all of the nice things that you want to have and to share with others – there is a major downside. This is of course the time following Christmas when the bills start to roll in and this most likely will means more debt and more bills you simply can’t pay off.
So, if you want to avoid this situation again this year – instead of borrowing this Christmas, perhaps some planning ahead can help you to save enough to cover all, if not much of the costs associated with your Christmas celebrations this time around. BY doing so, you may just find that the cheer can last long after the Holiday Season has ended, instead of having it come to a screeching halt at the sign of that first huge January bill.
Here are 4 Budgeting tips to help you Save for your upcoming Christmas Expenses
1) Review Your Current Budgeting
Number one on this list is to look at your present budgeting practices. If, for example you are currently in debt and are having trouble paying off your bills, you will definitely want to review your budget to see if there are areas you can improve upon. Have you been overspending and exceeding your current income? Are there areas of your spending you can cut back on or weed out of your expenses altogether? If so, this should help with your efforts of putting some extra money aside for Christmas – or on the other hand, starting to paying down your bills more effectively and then being able to save.
At this stage of the game you will also want to start thinking about how much you have spent on Christmas expenses in the past, in order to identify how much you are expected to spend again this upcoming holiday season. To cut down however on this expenses, questions you can ask yourself can include, ‘how many people do I need to shop for this year?’, ‘are we able to cut down on the gifts this year and/or can we implement a gift exchange, instead of buying for each family member and therefore reduce our overall holiday spending?’
Ultimately, you can ask yourself ‘what did we buy last year that we really don’t need this year?’ From the get-go, this strategy can help you lower the amount you need to spend – and will have to budget for in the first place.
2) Set Your New Budget
Secondly, in order to start saving for Christmas spending you will need to have your entire budget pinpointed as well as how much you will need for these specific expenditures. If, for example you have devised that for holiday food & drink, decorations, gifts, travel, etc, it is going to cost you about $500 to $700 this year – then having this value in mind now means you know how much you aim to save each month until you reach your goal.
As you have already strived to reduce your spending in various ways, then maybe you have also lowered the amount of Christmas spending quite drastically from the previous year. Learning from any past missteps can always help influence your budgeting, spending, and saving behaviours moving forward.
3) Commit to a Savings Plan
After you have determined how much you will need to save for Christmas, then you will need to have a plan for how to go about doing this in a way that makes sense for you. Ultimately however, what you want to do is to treat this savings plan in the same manner as you would when you are prioritizing the payment of any one of your other monthly bills.
Committing to this plan, also means ensuring you are saving a regular sum of money each month or each week even – whichever is more realistic for you. Approaching this realistically in turn means that you will choose a manageable payment amount, so that you can stick to it and don’t risk getting into a pattern of missing a month or two here and there – and before you know it you have stop saving altogether.
Additionally, where will you keep the money? Will you place extra cash into a money jar every month or will you transfer money directly into a savings account? Automated transfers can also be pre-arranged so that a set amount goes into your savings each month. This method can also ensure you stay dedicated to this savings plan over time.
4) Earn a Little Extra Money in your ‘Off-Time’
If you are currently making as much money as you can from your job and in turn most of this money is tied up in paying other bills, perhaps you can start to look for alternative methods of collecting a little bit of additional money for that Christmas money jar.
There are various ways to help you earn extra cash, including selling items of your own like clothes, furniture, electronics and so on. You could choose to sell these from various locations as well – eBay, kijiji, or also various online auction sites that exist in your area. In the end, you want to be earning more than you are spending – so by selling things as opposed to collecting them – you can score yourself some additional money that can be used towards any Christmas expenditures this year.
Ultimately, by budgeting more effectively and keeping up with your payments, you can also look to improve your bad credit situation. All in all, by incorporating these above mentioned means of budgeting into you savings/spending plan – then not only should you have some extra money saved for many of your Christmas expenses – you also won’t add to your debt loan and risk derailing your credit score even further by using your credit card as your go-to payment source – with no real means of paying it off any time soon.
Therefore, even with bad credit can you adhere to your Christmas savings plan. By prepping for your Christmas shopping now – you can essentially spread the spending over a few months by saving that money now and not charging it all later on. In turn, this approach to spending can help you avoid feeling the weight of the January Winter blues – and instead you can hug tight to the warmth and the joy of the holiday season.
