Financially Fit in 5

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Tis the Season – Some Personal Finance Tips to Guide You Through

Happy start of the holiday season. So much to think about, so much to plan, so much to do. It’s no wonder that personal finance tends to take a back seat in our busy lives during this time. Here are a couple of thoughts on how to stay in the driver’s seat this holiday season.

If you are looking to set up a budget for your holiday shopping and aren’t sure how to start, here’s a link to a holiday shopping budget courtesy of Practical Money Skills. It not only includes the costs of gift giving but also includes holiday meal and entertainment costs.

As far as guidance as to how much you may want to spend in setting up your budget, you can start by using 0.7 percent of your annual salary. Of course, you would want to consider your personal situation and adjust the number from there. Be realistic about what you can spend.

As it is always recommended, you should never go into debt by spending more than you can afford. If you have to charge the cost of a gift on a credit card with an existing balance that charges 21% interest and you can only make the minimum payment, it could end up taking you more than 5 years to pay for that gift. It could also cost you more than 3 times the cost of the gift if you have to pay it over time at a high interest rate. Do that several times, and you might find yourself in 20 years still paying off that $50 sweater you gave to a friend  with whom you haven’t kept in touch.

If you plan on making charitable donations during the season, consider checking the integrity of the charity through Charity Navigator. Charity Navigator is a charity evaluator and they provide free ratings of a charity’s financial health, transparency, and accountability.

If you are going to purchase gift cards, be mindful of the “stripped gift card scam.” For those gift cards that hang on displays away from supervision, be aware that thieves can mark down the gift code or use a magnetic reader to get the gift card details thereby enabling them to use the card and “strip” it of its value. At the time you buy the gift card, make sure that the cashier verifies the full amount available on the card.

It may go without saying, but try not to purchase anything at full price. There will be sales every day from Black Friday through Christmas Eve. The best “sales” days are generally December 10th through December 24th. Retailers want to sell the goods before the holiday and reduce inventory rather than markdown even more after the holidays.

Take the time to review your bank and credit card statements. I recently wrote an update on both my LinkedIn and Facebook pages noting that I had seen a preponderance of restaurant tips being changed (i.e. $10 to $16). Make sure to match up your receipts to the credit card statements and bank statements. By reviewing your balances weekly, you will be able to identify fraudulent charges more quickly.

Be mindful of holiday crime; it’s comes in all shapes and sizes, just like gifts. Whether you are a mom mindful of “stroller stealers” (thieves who target moms with strollers), a person watching for “shoulder surfing” at the check-out counter, or a consumer shopping with credit cards that have the potential to get hacked, it pays to be vigilant.

I hope you enjoyed reading this month’s Financially Fit in Five.  The LC Group provides daily money management services and can assist with financial education, organization, bill pay, and budgeting.