Save for the holidays now, avoid regrets later



Incorporating vacation expenses into your budget throughout the year is effective in avoiding debt, but it is not always doable with a limited budget or unforeseen expenses.

When it does, the lack of a vacation spending strategy can leave you vulnerable to debt and overspending that delays your financial goals. But it’s not too late to come up with a last minute plan to save money for the vacation.

The small year-end window can offer some time to make money moves that help avoid a hangover while on vacation.

When figuring out how much to spend on vacation, start with your budget, suggests Jason Speciner, a certified financial planner with Financial Planning Fort Collins.

“Start with how much money you’re willing to spend – and able to spend – on gifts, then work your list accordingly,” he says. “Don’t put the cart before the horse and end up spending too much because you’ve, you know, put dozens of people on your gift list,” he says.

If your debt or budget doesn’t leave room for holiday spending, plan to hang out with people through free holiday activities, give gifts, or save with a secret gift exchange. Set your expectations early by alerting people to your plans.

Adding to the debt pile while on vacation is expensive and takes longer to pay off. Develop a strategy for paying off your debt and prioritize high interest debt first. With good credit (a FICO score of 690 or higher), a balance transfer credit card allows you to transfer debt from a high interest credit card to one with a lower interest rate, possibly a Introductory APR of 0%. There is usually a fee of 3% to 5% assessed for each amount transferred. Interest-free, your monthly payments are applied directly to your balance, reducing your debt repayment time. With less than ideal credit, a debt management plan through an accredited nonprofit credit counseling agency can offer relief if you’re struggling to progress.

If you are debt-free and are considering getting a new credit card, look for one with a signup bonus that may offer extra cash or rewards to cover vacation expenses. Sign-up bonuses typically offer a three-month window to meet spending requirements, and they may be easier to achieve if you charge daily and vacation expenses. A card with 0% APR on purchases can also save money on interest for a while.

A cash back app can generate additional value on daily purchases. It may require uploading receipts, but for Krystal Sharp, coupon coach and creator of the Krys the Maximizer blog, it’s worth it. She uses Ibotta, Fetch Rewards, and other apps to earn money or gift cards. These apps allow you to add in-store or online offers from select retailers and earn money on eligible items purchased. Or you can download a receipt to take advantage of certain offers. You can also earn incentives by referring other people. For added value, Sharp uses a rewards credit card to make purchases and earn income.

“I try to focus on how to earn gift cards, get referrals, save enough in store, and use my in-store rewards to buy things we need for the holidays,” she says.

Depending on how much you spend, it’s possible to make $ 20 to $ 25 in a week or two with daily purchases, and that’s usually enough to cash in, according to Sharp. The gains add up over time.

A sure-fire way to save money is to refrain from making unnecessary purchases for a certain period of time. You can try an expense-free month, expense-free weeks, or expense-free weekends, depending on your preference. The money saved can offset potential costs while on vacation.

For Courtney Clarke, creator of YouTube channel TheLifeOfCo, a “no-spend November” helped her stay on track with her debt goals in 2020. For a month, she spent only most of the money. , avoiding restaurant meals and activities that cost money.

“I certainly can’t say I was perfect at it, but it’s just a nice reset to retrain your brain,” says Clarke. “It’s just about making sure you’re trying to get the most out of it. ”

She admits spending to eat out when there wasn’t enough time to prepare a meal, but even after getting lost every now and then, she still saved over $ 300 this month.

Make money for the holidays by buying a side job now or decluttering your home. When it comes to working together, there are plenty of flexible side jobs you can do in your spare time, from carpooling to deliveries. Or if you’d rather save time, sell those dust-collecting items in your closet to consignment stores.

“I sold a ton of stuff to Plato’s Closet and Once Upon a Child to get rid of it,” says Sharp. She estimates that she earns on average about $ 50 per trip or $ 200 to $ 300 per year.



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