3 Tips for A Happy Financial New Year 'Tis the season for colder weather, family get-togethers, and -- let's not forget -- the highest credit-card spending Americans will undertake over the course of the year. Many of us get caught up in the holiday spirit, only to wake up on Jan. 1 realizing that we've blown our budget and have to pay off the debt. This season is expected to be no different, with the National Retail Federation predicting that the average person will spend more than $804 on holiday-related purchases this year, up about 5 percent from last year.
The good thing about holiday spending is that with a little bit of planning, you can expect a happy financial new year. Here are three simple ways to keep your holiday budget on track:
1. Make a list and check it twice. Overspending around the holidays makes many Americans anxious -- especially those who may be newer to the shopping frenzy. A new Bank of America survey of millennials, for instance, finds that while 70 percent enjoy getting holiday gifts for their family and friends, 45 percent worry about overspending on those gifts. So, before you begin ordering gifts or reserving your plane tickets, establish what you're able to spend in total, and make a list. This is especially important if you're looking to make big purchases. Paying for that new 75-inch TV, for example, becomes much more feasible when you budget for it in advance.
Check out these videos for tips for saving for a large purchase and how to set a budget and stick to it.
2. Avoid last-minute shopping. Waiting until days before the holiday to pick up your gifts is a recipe for overspending. Not only does the time crunch limit your freedom to comparison shop, the pressure of the looming holiday deadline could result in more impulsive spending. For online shoppers, the soonest you can place your order the better to avoid the steep cost of expedited shipping.
3. Keep tabs on your credit charges. If you're charging holiday items, consider checking your account at least once a week to monitor how much you're spending. Charges can add up quickly, and so can interest: The average annual percentage rate (APR) is currently around 15 percent. To avoid this interest, pay off the balance on your card before the end of the grace period (usually 21 to 25 days after the completion of a billing cycle) to avoid additional charges.
And if you know you absolutely, positively won't be able to pay off your full credit card balances, try to use cards with a lower annual APR. Some cards actually offer 0 percent APR for an introductory period, so using those cards means no interest during that period. But make sure you always pay the minimum on your cards each month to avoid late fees and a negative impact on your credit report. Learn more about credit card debt by watching this video.
Even though the holidays can be an expensive time of year, by starting early and making a plan, you can keep your holiday spending under control. For more resources and simple, interactive videos to address all your financial questions, visit BetterMoneyHabits.com.
Video presented by Better Money Habits
The material provided on the video is for informational use only and is not intended for financial or investment advice. Bank of America and/or its partners assume no liability for any loss or damages resulting from one's reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management.
The good thing about holiday spending is that with a little bit of planning, you can expect a happy financial new year. Here are three simple ways to keep your holiday budget on track:
1. Make a list and check it twice. Overspending around the holidays makes many Americans anxious -- especially those who may be newer to the shopping frenzy. A new Bank of America survey of millennials, for instance, finds that while 70 percent enjoy getting holiday gifts for their family and friends, 45 percent worry about overspending on those gifts. So, before you begin ordering gifts or reserving your plane tickets, establish what you're able to spend in total, and make a list. This is especially important if you're looking to make big purchases. Paying for that new 75-inch TV, for example, becomes much more feasible when you budget for it in advance.
Check out these videos for tips for saving for a large purchase and how to set a budget and stick to it.
2. Avoid last-minute shopping. Waiting until days before the holiday to pick up your gifts is a recipe for overspending. Not only does the time crunch limit your freedom to comparison shop, the pressure of the looming holiday deadline could result in more impulsive spending. For online shoppers, the soonest you can place your order the better to avoid the steep cost of expedited shipping.
3. Keep tabs on your credit charges. If you're charging holiday items, consider checking your account at least once a week to monitor how much you're spending. Charges can add up quickly, and so can interest: The average annual percentage rate (APR) is currently around 15 percent. To avoid this interest, pay off the balance on your card before the end of the grace period (usually 21 to 25 days after the completion of a billing cycle) to avoid additional charges.
And if you know you absolutely, positively won't be able to pay off your full credit card balances, try to use cards with a lower annual APR. Some cards actually offer 0 percent APR for an introductory period, so using those cards means no interest during that period. But make sure you always pay the minimum on your cards each month to avoid late fees and a negative impact on your credit report. Learn more about credit card debt by watching this video.
Even though the holidays can be an expensive time of year, by starting early and making a plan, you can keep your holiday spending under control. For more resources and simple, interactive videos to address all your financial questions, visit BetterMoneyHabits.com.
Video presented by Better Money Habits
The material provided on the video is for informational use only and is not intended for financial or investment advice. Bank of America and/or its partners assume no liability for any loss or damages resulting from one's reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management.
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