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Make a Financial Plan for a Great Christmas

Here we go!! From today until Christmas, you will spend a few days shopping. And more than a few of the retail stores you visit are going to try to seduce you into applying for a store credit card.

They might say something like, “You’ll save 10 percent on today’s purchase by applying for a retail store credit card.” Almost every major store has a promotion intended to lure people into signing up for a retail store credit card.

Don’t do it!

Retail store credit cards will hurt your credit score; and they can hurt your wallet.

Ask yourself the question: “Why would retail stores promote these cards with discounts unless they know they can eventually make money off the retail store credit cards?”

This is just one of the holiday traps that people fall into. Another trap is buying more things than you have the money to spend and going into debt.

Enjoy Christmas all the way into January and February—by not having to “pay off” Christmas for several months.

Consider these ideas.

Have a Good Christmas Financial Plan.

1. Plan now how much you will spend for Christmas, have a clear plan on how you will pay for it and then stick to the plan.

Make mathematical decisions and not emotional ones.

Do you really need to spend as much on gifts as you have in the past?

Christmas spending statistics

  1. In the U.S., $400 billion is spent each year at Christmas time.
  2. 50 percent of people spend more than they can afford.
  3. 40 percent have to use a credit card to cover the cost of Christmas spending.
  4. For 33 percent of people, it will take six months to pay off their Christmas spending.
  5. 20 percent of people will have trouble making mortgage or rent payments in January because of Christmas spending.
  6. Research by Lloyds Insurance in the U.K. found that the average child in the U.K. has an accumulation of toys worth over $1500, and in the U.S. it’s even higher.
  7. Children’s Mutual said that kids are given on average 10 gifts besides what their parents give them.
  8. 40 percent of the toys given in December are broken by March.

2. Don’t go into debt on Christmas spending. 

Debt brings stress and anxiety throughout the year. No one who truly loves you wants you to go into debt for them.