December 6th, 2011 2:34 PM by Gregg Mower
The holidays are a time to relax and think of family and good cheer. We also have created this tradition of exchanging gifts. This can get people in trouble with credit this time of year. People also will tend to dip into the savings they have built for the year, that could be used to better your financial situation by purchasing a home or investments that will, in the long run, be better than an Xbox. Did you know that most wealthy people have vast real estate holdings as it is a hedge against inflation as well as a growth asset.
So when you are trying to keep up with the Jones or make your kid happy for an hour out of the year think of the long term happiness you will have with financial security. If you over spend on credit your credit score can go down as well the possibility of getting yourself overextended where you can't pay your bills. This time of year you should make a plan for spending and paying off debt. With any good plan you need to know what you have and what you will have in order to plan for holiday spending. What you need to do is write down your income, your savings, and how much your currently monthly outgo is. This is where you start, if your income is currently not enough to pay for your current obligations then you may want to seek relief now in the form of Bankruptcy or credit counseling. If you have income that is left over after you pay your normal bills consider that as savings, look at the savings you have build up from the prior months and determine an amount you are comfortable spending without breaking the bank. Once you have your number write it down and then figure who you are buying for and then put dollar amounts next to the names making sure not to go over your spending amount. This will allow you to enter the New Year under control of your finances.
I hope this helps with planning your shopping for the holidays. If you can master that then you just have learned the are of budgeting and you can use this technique each month to plan for your expenses and your savings.