Once again it’s the most wonderful, wonderfully expensive, time of the year. Gift giving is ingrained and expected at the holidays in our culture. Plus, it is uniquely satisfying to give a great gift. What better way to show someone you really care than splurging on something that makes their eyes shine? However, if you are planning to make big money moves like purchasing a home in 2019, navigating the perilous free fall of holiday gift giving without wrecking your credit is crucial.
But just because you’re watching your credit, doesn’t mean your holiday cheer has to suffer, all it takes is a little forethought and savvy planning.
Set an Itemized Budget
Not going over budget on the holidays goes a little something like this:
- Step 1 – Write down how much you can afford to spend on presents this year.
- Step 2 – Make sure you are not budgeting more than you can afford to pay off at the end of the credit cycle.
- Step 3 – Then write down everyone you want to give a present.
- Step 4 – Then decide how much you want to spend on each person so that the total equals the first number you wrote down.
Yes, I know, it flies in the face of sentimentality to assign dollar signs to friends and loved ones, but we’re talking about buying a house, baby!
I don’t have any science behind this, but I thoroughly believe (from my own personal experience) that the further out you buy your presents from the holiday, the more likely you are to stick to your budget.
The stress of last minute shopping often makes us overspend, but stay strong. If you spend more on someone than you allotted, that’s okay, but you will need to subtract the overages from someone else’s allotment.
Sorry, Uncle Dan, but you should have told me what you wanted earlier.
If someone’s gift ends up costing significantly less than you planned, try to resist the urge spend it somewhere else and pocket it for your 2019 savings.
Simplify Your Spending Strategy
If you have trouble tracking expenses over multiple cards, designate one of your credit cards, preferably the one with the best cash back or rewards options, as your “holiday gift only” card to easily keep tabs on your spending.
Encourage Low Expense Holiday Parties
Families and friend groups will often want to congregate during the season, don’t be afraid to suggest potluck dinners or white elephant or dirty santa in lieu of everyone buying everyone else presents. It often turns into something fresh and fun instead of everyone giving each other candles and midrange kitchenware.
If you do host any of these get togethers at your place, make it BYOB.
If Traveling, Ask Family to Cover Costs as a Gift
Plane tickets aren’t that cheap. If you pitch it as ‘All I want for Christmas is to see my family,” most loved ones will take the bait. Honestly, free travel is way better than that electric blanket your Mom bought back in July at Macy’s, and she’ll probably still give it to you anyway.
Use the Holiday Down Time to Audit Your Credit Score
The credit bureaus allow you to pull your credit score once a year – each. Set aside a morning you are not working to review all of these. This is an absolute must if you are looking to buy a home in 2019. Removing bad marks will make you more attractive to banks.
For those who may have bad credit with several bad marks, Lexington Law can help with filing disputes or challenging specific items on your credit report. They’ve helped over 100,000 clients remove inaccurate and unverifiable items from credit reports such as late payments, collections, charge-offs, and more.Get a jump start on the home shopping process by correcting your credit. Learn more about Lexington Law here.
Ask for Gift Cards
Gift cards used to an ‘oh crap, I forgot to get Uncle Shawn a present’ failsafe that would end up slowly losing value in a drawer unless you had a penchant for half priced apps Applebee’s.
Nowadays, the gift card game is so strong, people actually want them. You can get gift cards to grocery stores or even gift cards for pay your power bill. Between Amazon, Mastercard and Visa gift cards, you can easily pay the first few months of 2019 food, toiletry, entertainment expenses and bank the extra in your home savings fund.
The biggest takeaway here is to not spend more more than you can afford to pay off at the end of the credit cycle.
More credit usage and debt is bad for your credit score. If you haven’t saved up any more for the holiday season, it’s okay. Aunt Linda will forgive you for the acrostic poem you give her. That’s what family does.
Keeping your credit safe and healthy (especially if you want to achieve a fantastic financial milestone such as homeownership) is more important than giving friends and loved ones material items they (probably) don’t need. This is why this time of year can be stressful from a financial point of view, but as long as you stick to your plan and focus on the people you love, rather than the stuff they might love, you won’t have to sacrifice much at all to keep your credit score as happy as the holidays.
Featured Photo: Dasha Crawford Photography
This post is sponsored by Lexington Law