Are you one of those people who struggle during the holidays to keep within budget? Do you end up using cash advances or maxing out credit cards to make all the purchases? Have you ever thought about starting a holiday fund earlier in the year? I know the year is well on its way; but just so you know, it is never too late to start saving, for anything.
I used to love to use my credit union’s holiday and vacation clubs when I first started living on my own. I was the aunt who spent way too much on my niece and nephews come the holidays, but I managed it without putting myself further in debt. I was also the one who had money to vacation each year and did not go in debt while sitting on the beach somewhere. How did I do it? Each January, I opened myself up a club accounts. I rationed our $10 a week for each and never looked back till it was time to cash in. That was the easiest way for me to build those funds. Money which is automatically transferred with no early access is a perfect recipe for splurges. Pay cash for gifts and vacations and end up having more income to use on other things.
I am particularly fond of the no early access. I’ve seen those piggy banks with the fancy labels, but a ceramic bank on my bureau is an easy target come emergency bill time. I don’t need a cash advance, I can break the pig open. This is a better choice over a cash advance, but will how will it affect my budget come time to holiday shop? Will using this money shrink my holiday spending or put my vacation on hold? Herein lays the battle to keep cash advance and credit card debt to a minimum.
High interest cash advances should never be kept unpaid over the long-term.
Unexpected costs tend to be the culprit of many budget woes. Not everyone overspends frivolously. There are many people who do not live paycheck to paycheck yet still have no extra income to support such emergency costs. One of the biggest culprits falls into the lap of debt. How much debt do you carry month to month and pay money in fees to extend the payoff? It is called interest. Whether it is the high interest of a cash advance or the sometimes lower interest of credit cards, each month a bill remains unpaid; your extra income is being dispersed to the creditors. Take a closer look at the amount you spend on interest each month. There is enough negative chatter about cash advances to know that these loans are bad news when not paid on time. Have you added up the amount you pay towards credit card interest?
Some of us pay hundreds of dollars each month on what we are to believe is “low interest” credit card payments. Minimum payments make our budgets so much easier to plan while our hard earned income is siphoned along the way. If you struggle come the holidays or never seem to be able to take that well deserved vacation, then it is time to turn your situation around and start saving for the extras. Check with your bank and see if it offers club savings plans. If you have more control than I, start filling a jar at home or set up an additional savings account just to spend later. You don’t have to rely on cash advances and credit cards to make ends meet. You work too hard for your money to let it land in the creditors hands.
