Don’t Fall Into These Holiday Money Traps


The holidays are a time to spread joy, spend time with family and friends as well as celebrate all of our accomplishments from the year.  The holidays are a happy time but unfortunately they are also a time when people throw out their money rules and get themselves into financial ruin over travels, gift giving, celebrations and parties.

During the holidays from Black Friday to New Years thieves tend to take advantage of all the holiday shopping.  Not only that, but as a Financial Planner I can tell you that shoppers are their own worst enemy during this time of the year.  We tend to adopt bad spending habits and our judgement can get thrown out the window.

Here are some money traps to avoid during this holiday season:

Accepting credit card offers for holiday shopping

It may seem every time you answer the phone, check your inbox or open the mailbox you may be getting a new credit card offer.  Banks and credit card companies know that people need money this time of year and they are happy to offer it in the form of a new credit card.

However don’t be fooled.  Money borrowed has to be paid back and this can lead to tight budgets come the New Year.  If your expenses are close to or equal your income now factoring in new credit card payments can be very stressful.

Start saving now so you can spread out your holiday shopping and avoid using credit cards.

Keep your information safe and sound

If you’re planning on making a list and checking it twice consider leaving your credit card at home during the holidays.  Credit card fraud is extremely high during the holidays and who wants to deal with having your personal and financial information stolen while  you’re celebrating with family and friends.  Not me.

Consider paying with cash for your holiday shopping and if you choose to use credit cards keep up to date on your activity.  Checking your account daily to ensure all transactions are legit is a good way to help spot any fraudulent transactions as soon as they happen.

Overspending to make others happy

This is a major financial faux pas that I used to make when I was in my 20s.  I used credit to pay for all my holiday shopping because I couldn’t actually afford to buy gifts.  I knew I didn’t have the money, but I wanted to find the perfect gift for all my family members.  Come January I found myself with a lot of credit card debt that I couldn’t afford to pay off.

I ended up making only the minimum monthly payments on several credit cards and after years of making the same spending mistakes over and over again I found myself over $50,000 in debt.  That was a mistake I stopped making and won’t go back to ever again.

Now I start my holiday shopping in mid November and spread out the expenses over several paychecks.  I would like to say that I put all my spending on a credit card to take advantage of the rewards points and then pay off the credit card in full each month, but unfortunately I just don’t trust myself when it comes to money so I pay for everything with cash.

Photo from Pixabay


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