It seems like only a few weeks ago it was Christmas and now it’s almost Christmas again. And, as usual we want you have a merry Christmas and even happier New Year free from unnecessary debt.
Therefore, as you enjoy the season and all it brings, maintain a high level of sobriety and keep your costs down, so that you will indeed see clearly in 2020.
Below are some tips from our financial literacy expert, Rose Miller that will help you to avoid racking up unnecessary debt this Christmas.
Use your bonus to improve your financial security
The Jamaica Stock Exchange for a third time has been named the best performing stock market in the world by Bloomberg. And with a string of highly successful public offerings in recent months, the stock market is almost sure way to earn handsomely on your investment.
“Instead of blowing your bonus on gifts, a significant portion, if not all the extra cash can be invested,” Mrs Miller advises.
“It is also a good idea to make some investment in your financial education, so the Christmases ahead will be even brighter.”
“She adds: “Consider placing those funds in a fixed or long term saving account, where they will earn higher interest; or in stocks, bonds; or other instruments offered by regulated financial institutions that will yield great dividends.”
Finance your debts
Persons may also use their bonus to finance some, if not all, of their debt, Mrs Miller recommends.
“Getting rid of debt is usually high on the list of New Year’s resolutions so it’s the perfect opportunity. You want to finance those debts so that you will have more to save and consequently invest when 2020 steps in” she says.
“If you’re heavily indebted, you may want to seriously consider not spending your bonus and using it to pay down or eliminate your debt.”
Tips to help you make it through the season
Create a budget and stick to it!
“Create a budget specifically for your Christmas spending and stick to it!” Mrs Miller advises.
“There are many things you may want or need; or even causes you would like to support; or parties you would like to attend. However, you need to prioritise and budget only for those items and activities, which you actually need,” she said.
And if you use a credit card as your main method of paying for goods and services, use it in accordance with your budget, she maintains.
“Remember your credit card is a loan, which carries a very high rate of interest; and interest will be accrued immediately after the due date. Therefore, spend only on what you can afford; and, most of all, settle your balance before the due date; or, as soon as you can, to avoid paying the interest,” Mrs Miller says.
She notes, however, that using a credit card to shop is aadvantageous especially at this time of the year, as it is safer than cash. In addition, some credit cards offer “cash-back” points, once you clear your monthly bill on, or before the due date.
“And, using your credit card instead of your debit card, also means that you avoid paying point-of-sale fees on your purchase. Those fees may be low, but they can add up and affect your budget,” she says.
Be creative with your gift ideas!
And, gifting does not have to be a spending spree, Mrs Miller says.
She suggests that instead of rushing to purchase gifts, people should consider creating their own gifts using their skills. Purchasing or creating gifts that can be shared by more than one member of the household, instead of providing individual gifts, is another idea to consider.
“It saves time and money, as you don’t need to shop for every single person.” And “Very often the gifts you create aren’t only less expensive, but they are more meaningful than items you buy in a store,” she said.
Let everyone contribute to Christmas dinner
Not even Christmas dinners and parties need to be costly, Mrs Miller points out.
“So you’re hosting the annual Christmas Dinner or party, but why do you have to do all the spending?” she questions. “Reduce your costs by spreading it around. Ask family and friends to take bottles of whatever they like to drink; or, to purchase a few of the items you will need, such as desserts or ingredients for cooking.”
“Invest and spend wisely. You will have a merrier Christmas and a brighter New Year for it,” Mrs Miller concludes.
