How to Avoid Overspending This Holiday Season - Money Tip Tuesday

The holidays are here, and it can be difficult to keep track of how much money you spend during this shopping season. If you’re worried about overspending this time of year, keep listening for a few practical tips to stay on the right financial track.  

Links:

• Check out TCU University for more financial education tips and resources!
• Follow us on Facebook, Instagram and Twitter!
• Learn more about Triangle Credit Union

Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast. 

If you want to avoid spiraling out of financial control due to the holiday spending frenzy the best thing you can do to keep control is to start with a budget. Creating a budget will give you more control over how much you spend by helping you strategize how best to distribute your money. The budget structure of your monthly income should be divided into three categories; needs, wants, and savings. You should portion your monthly income into each category at the following percentages: fifty percent towards needs, thirty percent towards wants, and twenty percent towards savings. 

Establishing a reasonable budget that reflects your monthly payments limits how much you spend as well as how much you want to save. A budget allows you to set expectations for yourself when it comes to spending wisely as well as saving for future purchases and your emergency fund. Let's dive into how to avoid overspending by limiting your spending, balancing your budget, and saving money. 

Limitations of Spending 

Think about your monthly payments that need to be made, whether it’s for a loan or a credit card, so you can set a limit on your holiday spending and day-to-day expenses from what you have left from your monthly income. Once you have that limit set, it’s important to keep track of all your purchases so you can keep your budget balanced and avoid overspending. 

Balance Your Budget 

Because your monthly spending can increase due to the holidays, you can adjust your budget a little while keeping it balanced. Simply change your income allocations from 50/30/20, that’s 50% needs, 30% towards wants and 20% to savings to something like 50/40/10, 50% needs, 40% wants and 10% savings. Slightly adjusting your breakdown can keep your budget balanced by ensuring you’re still covering bills and purchases, without completely neglecting an important category like savings. 

Save Up for Back Up 

Saving money through a budget can be rewarding and provides financial security. But savings only works when you stick with it. The purpose of saving is to make sure you have funds available for future expenses. That could be an emergency fund so you have money set aside to cover an emergency, or it could be a separate savings account for a big vacation or purchase, like a house. Putting a portion of your monthly income into a savings account is critical to staying on financial track throughout the year and helps you reach your long-term goals.  

This is a busy and hectic time of year, making it particularly difficult to avoid spending more than planned on gifts, travel and other holiday expenses. Making sure you set up a proper budget with set allocations gives you control over your money and keeps you from spending way too much during seasons of spending, like the holidays. 

If there are any other tips or topics, you’d like us to cover, let us know at tcupodcast@trianglecu.org.  Like and follow our Making Money Personal FB and IG page and look for our sponsor, Triangle Credit Union on social media to share your thoughts.  

Thanks for listening to today’s Money Tip Tuesday and be sure to check out our other tips and episodes on the Making Money Personal podcast.  

Have a great day!