When it comes to your finances, do you take a head-on or head-in-the-sand approach? If you identify with the latter, the good news is you're not alone. The bad news? You're not alone. Data suggests that when it comes to managing money, women are not as independent as you'd expect. In fact, 91% of women in heterosexual couples are not participating in financial decisions. But we want to change that statistic. To help you become a master of your own finances, we're debuting a new series called The Paper Files, where we uncover tricks and tips that will help you manage your money and your future. Ready to take it head-on?
If you're anxious about overspending this holiday season, you're certainly not alone. Nearly three-quarters of Americans say they fail to budget properly for the holidays. Those who went into debt last season accrued an average of $1054 in new debt. Indeed the season of spending is upon us, but you don't necessarily need to sacrifice your social schedule for the sake of saving money over the holidays.
However, given that the National Retail Federation predicts the average American will spend about $1007 this year, we decided to turn to an expert for financial guidance to help get us through the season. Thankfully Keri Danielski, a consumer finance expert for Mint and Turbo, says that by following a few simple money management strategies, it's possible to keep your spending under control and enjoy the festivities through January 1.
Here are four simple, actionable money tips she recommends for making the most of your winter without going broke.
Have a shopping strategy
Now's the perfect time to evaluate your upcoming expenses and develop a spending strategy for the season. "Create a manageable budget and set a spending ceiling for every holiday item you plan to buy, including decorations, gifts, and eating out," suggests Danielski. To track your spending habits over the course of the season, use a money management app, such as Mint, which will do the accounting for you.
The bottom line: "If sticking to a budget is hard for you, leave the debit and credit cards at home and take cash instead," she advises.
Think about giving back
Between your co-workers, your friends, and your family, the list of people you need to buy gifts for just keeps getting longer and longer. If you're wondering how you're going to afford it all, Danielski advises proposing a proactive solution that everyone can feel good about. "Instead of worrying about how much money you're spending on everyone on your list, suggest the alternative of donating to an agreed upon charity," offers Danielski.
The bottom line: Propose a modest amount of $5 or $10 as a limit for donations. "This way, you're not spending a ridiculous amount and can feel good about giving back," she suggests.
"There are a plenty of ways to save on your holiday spending without making major lifestyle changes," reassures Danielski. "If you have holiday party after holiday party to attend, shop your closet or borrow something from a friend," she suggests. Challenge yourself to put a fresh spin on a fancy dress or holiday party-appropriate suit, Danielski offers.
The bottom line: Rather than "buying gifts for your co-workers and neighbors, plan to bake up a storm instead," she suggests.
Credit cards can help
When you're all out of options, credit cards can help. "If you've done all you can to keep your holiday spending in check but fear you might still need to accrue a bit of credit card debt, first off, accept it," Danielski advises. "Don't beat yourself up over it. While it's not ideal to spend beyond your means, it's worse if you don't pay attention to how much you're spending."
The bottom line: "If you're going to put a few purchases on your credit card, set a limit and commit to a repayment plan after the holidays," she says.