For most people, December is a month filled with holiday cheer, but there is always the threat of January looming in the distance. This year, we wanted to take a look at what we could do now to help take some of the stress out of the start of the new year.
Create a holiday budget
You may have already started your festive spending, but before the holiday season kicks into high gear, sit down and create a detailed budget. Allocate specific amounts for gifts, decorations, travel, and entertainment. Stick to this budget to avoid overspending.
If you find that your budget is already looking pretty ambitious, take the time to decide which expenses are most important and which can be scaled back. That way, you can stay within your financial limits while still enjoying the holidays.
Pay down high-interest debt
Use any extra funds you have in December to pay down high-interest credit card debt. This might not be the most exciting way to spend a Christmas bonus, but your future self will thank you for it.
If you have multiple credit card balances, consider transferring them to a card with a lower interest rate (a balance transfer card). This can help you consolidate debt and make it more manageable.
Set aside an emergency fund
Aim to set aside a small amount of money each week in December to build or replenish your emergency fund. Even a small cushion can provide peace of mind and help you handle unexpected expenses in January.
Make sure you factor emergency fund contributions into your holiday budget!
Take care of year-end tasks
There are a few chores you can do now to help you get ahead for January. Go through all of your subscriptions and memberships to check you still use them and whether anything needs to be renewed before the new year. This is a good time to cancel any you no longer need so you can start the new year as you mean to go on.
You should also check your credit report for any errors or discrepancies. Addressing these issues in December can be a good way to do a mini audit of your credit details to round off the year.