Saving Up for a House? How to Avoid Holiday Debt This Year
Saving up for a house is exciting, but it’s also a major undertaking. The days and months pass and your savings account gets larger and larger. But then, suddenly, the holidays arrive and you start to worry about how to maintain your hard-earned savings during the season of gift-giving. Luckily, with a little extra care and planning, you can avoid holiday debt, stay on track with your budgeting goals, and keep saving to buy a home.
To help you get started, we tapped some of the top financial experts to ask for their best advice – and they delivered. So before you start your holiday shopping or take advantage of Black Friday deals, keep reading to learn how to avoid debt and stay on track with your savings goals this holiday season.
Have established expectations with the people on your gift list this year. Stick with cash and debit cards – and if you typically exchange with your “extended” family or friends talk with them this month about going with a small special gift or just dropping that practice. Most of us already have what we need – if you can’t, stick with specific gift cards of a certain dollar amount to control spending. – Balog + Tamburri, CPAs
Don’t let a lack of traditional financing options get in the way of your holiday shopping. By leveraging lease-to-own alternatives you can get what you need today and pay over time. Save money with a 90-day purchase option. This frees up cash rather than locking it up in a single purchase. – Acima
If you’re saving up for a house, be on the lookout for big bargains. It’s hard not to get sucked into over holiday spending. Make a game of doing the best gift for you; not having any holiday debt hangover in January. Budget an amount for each person that you will be gifting to and look for the big bargains. – Wiser Wealth Management
Take advantage of buying the low cost of stocks on the market as a gift. Stock shares can be gifted to your children to teach them about money and investing and also can be tailored to their interests or hobbies. There is a tax advantage to save tax dollars from the gain by granting stocks as a gift to them when they grow up. – Manay CPA Inc.
Sell items you no longer need or want online for some extra cash. A great way to avoid holiday debt while you’re saving up for a house is to round up key items around your home that you don’t need or want and then post them online to be sold. This can add a little extra cash to your holiday budget while also adding a little extra room in your home. It can also help you realize what you and your loved ones haven’t been using, which may help you narrow your hunt for the perfect, budget-friendly gift. – Wheelhouse Credit Union
Get creative with your gift-giving. Don’t put pressure on yourself to spend big during the holidays. Consider setting a gift budget that you can easily cover from your income, without dipping into savings. Rather than buying something online, get creative; the most thoughtful gifts often aren’t the most expensive. – Darrow Wealth Management
Use credit card points to purchase gift cards. Instead of paying cash for presents, you might want to consider using your credit card points to purchase gifts cards especially if you are delaying travel plans during the pandemic. If you are lucky enough to get a holiday bonus, consider using a portion of it to pay down high-interest credit card debt, start an emergency fund or make an additional contribution to your employer-sponsored retirement plan or IRA. – OneGroup Retirement Advisors
Go into the holiday season with a plan. The best tip in order to keep your finances in check during the holidays is to have a plan on what you can spend without breaking the nest egg or adding to credit cards and stick to it. Simple, but not easy. – WMGNA
Create a cash flow bucketing system. Don’t get snared by the dreaded holiday spending trap. Instead, continue earmarking and escrowing your hard‐earned dollars towards future household goals using a disciplined cash flow bucketing system. – Damian Winther, CFP® CSRIC™ – Principal – Financial Advisor, Birchwood Financial Partners, Inc.
Give the gift of time. A great way to save money this season, especially given the COVID pandemic, is to give the gift of time. Volunteer to help out friends and family with chores and errands that they need help with or possibly cannot do themselves. – FamilyVest
Originally published by Redfin