Holidays are around the corner, and as expected, you will travel and buy gifts. But they are expensive, and it is expected to become more costly due to multiple factors. The pandemic impacted every sector connected to vacation - flights, hotels, restaurants, shops, etc. As a result, consumers are expected to spend more than 20% this Christmas. While there is no need to cut costs significantly, you may want to curb some spending to ensure that you can financially catch up post-break.
Here are some ways to navigate around holiday expenses:
It might seem like common sense; however, not everyone prepares for holiday expenses. Early saving eliminates a lot of the stress that comes with spending and reimbursement after it. On average, it takes six months to save up for vacation. If you start saving small, at least a year early, you will be able to fulfil the obligations that come with festivities without sacrificing your quality time. If you do not know how much you need for this year's holiday, look at your last year's expenses and calculate the amount you need to set aside every month to reach that goal. Observe where all the money was spent and allocate the money accordingly.
However, do not expect to stick to your budget strictly. Life is unpredictable, and situations may arise that may prevent you from sticking to your budget. Such could be medical expenses, maintenance costs, or you may be fired from your job, which has manifested into reality during this pandemic. It is very important to be prepared for unexpected circumstances. Although unpredictable incidents are subject to individuals, there are some basic measures you can take to be prepared:
It may be tempting to use your credit cards to pay for some of the costs. But note that they are not necessary items that you need to spend for. Credit cards should only be the last resort for an emergency, not to be used for vacation-related expenses. Therefore, acquiring debt for holidays will result in far more serious repercussions that you might not recover from. If you have the cash to pay for it, better to pay without incurring interests.
If you do not have available cash and must get the item, check for low-interest instalment payment opportunities. Instalments can be a financial lifesaver, especially if you make a big purchase (like electronics). Although undertaking instalments is still undertaking debt, credit card interest rates are much higher than the interest offered under instalments. Interest rates for instalments are fixed and have a specific schedule to pay, allowing you to easily get the debt under control. They may also offer tax benefits, depending on what you are buying.
Nothing is stopping you from shopping if you have the means. You can still cut down by sticking to some basic disciplines:
Holidays are stressful. It brings multiple things into one place, which can be overwhelming for many people. Finances, family dynamics and post-festive recuperation can cause anxiety. But it need not be so daunting. Preparation is the key to a stress-free vacation. Having a plan that incorporates your well-being is the best way to ensure that everyone will have a good time.
Last update: 02/12/2021
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