5 Spending mistakes to avoid this Christmas

 It is that time of the year when you absolutely rejoice with the colorful celebrations around you. Buying gifts, pampering yourself with new additions, sweets and gatherings; all this is a given right now. But are you prepared to keep up with all this financially and anticipate its implications on your credit score?

Imagine planning to go all out with your celebrations and realizing that your financial kitty is not up for it! That would be an absolute mood dampener, won’t it? But how does someone manage all these serious preparations amidst the spirit of fun and celebrations?

Related Reads: 5 Simple Steps to Create a Successful Monthly Budget

It is easier than you think! If you plan ahead and keep a special eye on not committing the following mistakes, your financial preparedness for the holiday season will be stronger. Here’s a list of mistakes you should avoid this Christmas:

#1 - Ignoring the importance of a maximum budget

When it comes to the happiness of your family members, you cannot put a price on it. But, there is a limit to which you can spend from your bank accounts! Apart from that, the festive season doesn’t cancel all your monthly expenses, bills, etc. So, planning is of utmost importance!

Before even making a list of people you want to buy gifts for, set a maximum budget first. Whatever the case may be, stick to it and don’t cross the budget in any case. This not only controls your spending, but you also know how much you can spend and you can peacefully plan all your presents.

#2 - Getting into the habit of picking extra credit to buy gifts

Gifts are not a compulsion, it is a gesture you want to extend to you near and dear ones. So don’t fall into the trap of buying extravagant gifts that you HAVE TO BUY! It is always advisable to buy gifts from your extra chunk of savings rather than taking a personal loan to buy gifts for your loved ones. It is important to keep in mind that an extra line of credit is important for your goals and milestones. Your gifts are supposed to be a source of celebration for you and your family instead of a burden that you need to repay through the coming months.

So, avoid taking on a new line of credit in the festive season if it is to buy gifts and decorations for your celebration. Remember that whatever you do now will stay on your credit report for a long time.

#3 - Not taking savings seriously

Savings are not only for big financial goals. It is also important to save for family commitments almost as much as it is for holidays. People often save for financial goals like home, car, travel and forget to save for these commitments. As a result, you end up spending from those savings and regret them later.

To avoid any extra financial burden and ensure a peaceful Christmas celebration, keep a chunk of your savings aside just for gifts and other Christmas related expenses. Preparing in advance will save you from resorting to a loan or credit card in the last minute and have a very merry Christmas.

#4 - Not prioritizing on what you really want this festive season

The festive season comes with a range of offers and as much as you plan on what you want to buy, there are bound to be instances where you wander away from it. But that won’t work in your favor! Take your time to decide what you really want to get yourself this Christmas and set the budget for that separately.

This will keep you from getting confused till the very end and compromise on the gifts you plan on buying for your family members. Setting different budgets will help you compartmentalize your expenses and save you for any last-minute worries you might have.

#5 - Getting attracted toward every offer you explore 

Yes, the offers are limitless in the festive season and yes, they are all attractive. Imagine buying gifts for 5 family members at the price of 3, won’t that be the best? But then, making up your mind is as important! You don’t want to go on buying things at a cheap price and find your way over budget and deep in debt.

Decide the period in which you would make all your purchases and stick to it. Once you are done buying all the gifts at the best price, stop following the trend of offers and discounts.

Remember that every step you take in this period could either make your financial profile shine like a Christmas tree or add more debt to your credit profile. Check your personal credit score throughout the festive season to ensure there are no surprises later!

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