How to Prepare Your Finances for the Holiday Season

The year’s closing months are an ideal time to be proactive about your finances and set yourself up well for the holiday season and the new year ahead. For many, financial concerns often rise with expectations to spend on gifts and entertaining family and friends this time of year, and this pressure may feel amplified given the uncertainties of today’s economy. According to a recent survey by Deloitte, Colorado consumers plan to spend 12% less compared to last year.  While worrying doesn’t solve much, having a plan to manage financial challenges can help ease the stress.

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Here are some tips for tackling your money stress and taking control of your finances during the holiday season from Bank of America’s Better Money Habits®.

Determine a Goal and Create a Budget for it.

Write down everyone you plan to give gifts to – from your nearest and dearest to your in-laws and the mail carrier. Then put a dollar figure next to each name. Setting price limits help you keep your holiday budget on track. For big-ticket items, start saving in advance and utilize your bank’s automatic transfer feature.  And keep in mind costly shipping fees – keep watch for special “free shipping” days.

Make Your credit card work for You

Many credit cards offer benefits from purchase protection and free credit score information to loyalty points and monetary rewards for everyday purchases like groceries and gas that help stretch your dollars further. Review what benefits your credit cards may provide. However, it’s essential to manage your credit responsibly and pay your credit card bill on time and in full each month whenever possible.

Make the Most of Your Income

When money is tight, it’s important to make the most of the income you do have. Know that small steps add up. For example, you may not be able to cut any one expense by $500 a month, but you may be able to identify five that you can cut by $100 each. Identify nonessentials you can scale back, such as entertainment and dining out, and do more free activities. And if you see that perfect gift but it’s out of your budget, price shop online – many stores will match the lowest price.

Homemade Gifts Are Always Appreciated

Homemade presents are great ways to save money while creating something memorable. These gifts might not work for everyone on your list, but they’re good options for some. Consider photos for grandparents or cookies for your kids’ teachers.

To help stay financially fit during the holiday season, Bank of America offers a wealth of free tips and advice though BetterMoneyHabits.com.

Roberto Hernandez is the Financial Center Manager at Bank of America , Denver