Christmas time can be a period of high financial stress for a lot of people. There is the pressure of buying gifts, costly holiday outings, increased food cost, and potentially, travel expenses and missed time at work. Looking at all these potential demands on your budget, it can be possible to ignore some the challenges that can occur when you think you are saving money. We have 5 simple tips to teach you how to budget for the holidays this year.
The Allure of Holiday Sales.
One of the less obvious challenges of the holiday season comes from the allure of holiday sales. Black Friday and Boxing Day provide opportunities to reap great savings on a wide variety of items as stores seek to have you spend more money over the holidays. The terms ‘savings’ and ‘spend more’ seem to be odd partners in this situation, don’t they? The fact is, spending $600.00 on a formerly $1,000.00 TV because it is discounted by $400.00, is not really saving you any money, it is costing you $600.00.
Like most aspects of your financial life, holiday sales can be beneficial if used correctly. Here are some simple strategies to help you get the most out of the holiday sales.
- Know what you want to buy.
If the first time it occurs to you that you should buy an item when you see it in a flyer or online advertisement, then it probably is not a good purchase. If you had not thought of it before now, chances are you do not need it. You know what items you need/want to work towards purchasing and have probably been looking at those items for a little while. Stick with this list, rather than the flashy ads.
- Do some research.
Thanks to the internet, we have ready access to all manner of reviews and buying guides. Finding a decent product and knowing what you will receive for your money is much easier than ever before. If you are looking to replace a television, know what size and features you are looking for and have a short list of products that satisfy your requirements. If you have just one option, then you may not see it on sale. Also, pay attention to the normal price of the items you are shopping for, some less scrupulous retailers may inflate their prices so they can claim increased savings.
- Plan ahead.
Black Friday and Boxing Day roll around every year. You can use the year leading up to these sales to set aside funds and do research. If you are in a shop on Boxing Day with no idea what you are buying or how you will pay for it, then chances are you will not be getting the most out of your money.
- It is okay not to spend your money.
If you cannot find a good deal on what you want, then there is absolutely nothing wrong with holding on to your money. That’s important to know when you are learning how to budget. Sales for consumer goods go on throughout the year and if you are in a situation where you can afford to wait, a little your patience may well be rewarded. Digital cameras, for example, often see a bit of a price drop in the spring as the new designs/models hit the market.
- Beware of “The latest thing”.
Marketing campaigns are great at explaining how the latest thing is going to change your life. With most consumer goods this is, to be generous, a bit of an overstatement. The average television has a life expectancy of around 7 or 8 years. No matter how state of the art your television is when you buy it, it will not stay that way. Buying the previous model can save a lot of money, and you probably will not really notice any difference.
Holiday sales are neither good nor bad in and of themselves, but the decisions you make around them can be. Purchasing items ‘just because they are on sale’ and using credit to do so can undermine your financial well-being with no real meaningful improvement to your circumstances. Conversely, planning ahead, and making sound decisions can maximize the benefits you see from your budgeting and financial goal setting. Taking time to learn about setting and achieving financial goals can further help with this process : http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br04001.html
These strategies can help you to maximize your budget and savings strategies to improve your quality of life, but if you find that you are too busy servicing existing debts to take advantage of them then it may be time to contact us for a Free Consultation. We will help you explore options for a fresh financial start.