Many families celebrate the holiday season with gifts of cash and gift cards. Deciding how to spend that money can be difficult for those who are not usually big spenders. The sudden influx of cash can end up causing many to overspend and end up with more stuff that will be lost or broken by the end of the month. Here are some practical tips for spending your Christmas Cash.
Start a Savings Account
Whether you are an adult with an established savings account and various stock holdings, or a kid with a precious stash of holiday money, it is always a good idea to put aside some of that money in a savings account. This teaches children the habit of saving, and will help adults have some money saved up for a rainy day. You never know when you may need an emergency amount of cash, and having put aside even as little as 10% of your gift money can come in handy down the road.
Pay off Debt
Although children do not usually have any debt built up, many adults do, and putting aside some of your Christmas money for paying that debt is a good idea. Paying down high interest credit card debts can save you more money in the long run, and paying off debt that has a high monthly minimum payment can free up your cash flow each month. Take a look at both the interest levels on your debt and the minimum monthly payments to decide where to put some extra holiday cash.
Go Shopping with Extra Cash
With gift cards, you have no choice but to spend the money instead of putting it in savings or towards debt. Take advantage of those gift cards quickly to maximize after Christmas sales. Be careful also, of holding onto gift cards too long, as many of them will start to depreciate in value over time. Purchasing items that are on sale or are on clearance will give you the best bang for your buck with gift cards. Be careful as you shop, though, and keep track of your spending. Stores love gift cards because shoppers usually will spend more than the card is worth, thus giving the store the best deal of all.
When contemplating what to spend your cash on, think carefully about what you want to buy before you leave home. Considering what you want to buy and sticking to your list will help you spend less overall. Set a price limit for yourself. Decide that you will only spend a certain amount of money on yourself and decide how you want to spend that money. This is a great lesson for kids, as it helps them think about what they want to purchase without spending all their money haphazardly.
As you anticipate spending your holiday cash, remember to keep in mind your savings account and debts first. Paying even a little towards both will benefit you financially down the road. Be careful to spend gift cards quickly and to think through what you will spend your cash on before shopping so that you get the best deals.
You may also be interested in unique gifts that save you money.
 |
