Plan It All: Festive Spending Tips!
Plan It All: Festive Spending Tips!
Posted on October 7, 2021
Festive Spending Tips!
“Tis the Season” and the itchy, trigger-finger is poised on the credit card!! Just like the expected over-indulging on some great Christmas meals, it's just as easy to over-indulge on spending for all Holiday expenses.
With more and more consumers using online shopping methods, it's far too easy to click, add to shopping cart and use the quick convenience of a credit card to pay. It's almost addictive - no driving to a shopping center, finding the closest parking spot to the entrance, merging in the crush of “masked” shoppers and leaving with armloads of bags and boxes. Instead, settle in your comfy chair, snuggled in sweats or pj's and simply click away from one online store to the next!
Credit cards certainly offer valuable benefits for both consumers and retailers, with the majority of us using a credit card as a method of payment rather than a means of borrowing. But before you settle in to shop, be prepared.
PLAN YOUR SPENDING:
Take time to write out the budget you intend to stick to and have it on hand as you shop. With each purchase, deduct from your limit to stay on track to not over-spend!
Part of the planning should include knowing the cut-off date for current spending to hit your credit card for the billing cycle. This takes a bit of forethought but knowing what date this is allows you to factor in what will be due in the next credit card statement. If your spending will exceed what you budgeted for this month, perhaps by making a purchase or two on your list after the billing cut-off date you can apply to your next month's budget - but don't get carried away and use this an excuse to SHOP TILL YOU DROP!
To avoid a nasty surprise when your credit card bill arrives, just be very sure you know what monies are coming in, and what is going to have to come out. Just like that over-indulgence on Christmas dinner can make the tummy uncomfortable, avoid the headache and stress of over-spending - that's going to take away the great memories the Holidays had for you.
PLAN YOUR RE-PAYMENT:
The goal should ALWAYS be to pay the entire balance with next billing statement, but minimally you should ensure the balance remaining is less than 35% of the credit limit extended to you. Your credit score reflects USING credit, but MANAGING it is even more important. Over-extending and carrying a high balance, or more than 35-50% of your credit shows a high debt-servicing ratio that will “ding” your credit that month.
To avoid impulse buying, and helping you to plan for re-payment is taking into consideration - If you had to pay in cash, would you be making this purchase? Online shopping really has its advantages that have taken over consumer spending, but it's still important to do some comparison shopping as a matter of habit.
Stop and factor in —comparing costs (shipping fees, any additional add-ons) and value. IGNORE ALL THE “EXTRA” OFFERS ON THE WAY TO HIT SUBMIT ORDER!! The same way retailers showcase little add-on products that line the shelves on the way to the till to pay - DON'T LOOK, AVERT THE EYES 😊.
By using your credit cards wisely, you can have a great Holiday Season without the guilt, remorse, or post-shopping letdown. USE YOUR CREDIT …. DON'T LET IT USE YOU!!!
Happy Holidays to one and all!
All the best for a safe, happy, festive season - and the best set-up to a tremendous New Year - 2022 will be awesome!
Anne Kolodynski - Personal Finance Consultant
RightRide / Auto Canada