It’s easy to get carried away with the gifting impulse at Christmas. So this year, why not give yourself the gift of a debt-free Christmas with these shopping and budgeting tips that will help you wrap up your Christmas costs?
How to stretch your Christmas budget
* Be a smart spender
Make a list that matches your budget and stick to it. For next year, start early and shop through the year when it’s easier to make the most budget-conscious decisions.
* Be creative
Give crafty from-the-heart gifts like scrapbooks, recipe books or photo albums. Reuse wrapping paper and gift bags from gifts given to you.
* Be a discount hunter
Take advantage of limited time offers. Look for discount coupons online or in your newspaper and don’t forget to check out discounted merchandise at your retailers of choice.
* Double down on a combo
Instead of buying individual presents for everyone in your family; get one present they can use together. Or join with another family member to purchase combined gifts instead of going the individual (and more expensive) route.
How to use credit wisely
Here’s the real cost of a $200 gift when you pay for it with a credit card instead of cash: If your annual credit card interest rate is 22 per cent and you only make the minimum payment of $10 each month, it will take you 26 months to pay off the debt and your total cost will be $251.43.1.
That’s why you should:
* Limit credit purchases
Avoid impulse buys and keep your cards in your pocket or purse unless you intend to pay off the balance each month. Don’t take cash advances on your credit card because you’ll be charged interest from the day you take the advance until the day you pay off the entire amount. If you are using your cards and do intend to pay them off fast, try to use cards that offer reward points that can reduce the cost of gift purchases.
* Make payments as soon as you can
Interest is charged daily so reduce your costs by paying promptly and always try to pay more than the minimum amount owing. If your balance is growing, stop using your credit card until you get that balance under control.
This year, give yourself the gift of a debt-free Christmas and the gift of long-term financial security with the right financial plan for you. Talk to your professional advisor about the best ways of wrapping up that precious gift.
*Financial Consumer Agency of Canada, www.fcac-acfc.gc.ca, Credit Card Payment Calculator
Article provided by Investors Group Financial Services Inc.and Investors Group Securities Inc. and is general information only, not a solicitation to buy or sell any investments. Contact your own advisor for specific advice.