The holidays are almost here, and you’re most probably knee deep in shopping and buying all your gifts and presents, booking staycations and making travel plans (safely) to see loved ones. But you might be making some key financial mistakes during your holiday splurge, which could cost you.
If you’re not sure where you could be going wrong, look out for the following mistakes that could eventually damage your credit score and show up as negative items on your report:
1. You’re buying without planning
If you haven’t made a list of not just the people, you need to give presents to, but what you’re getting them, you’re asking for trouble. Having a list will help you decide what you need to give, how many presents you need to buy, and who you’re gifting to—and who you’re skipping. It’s important to do this otherwise, you’ll be panicking over missed presents for friends, colleagues and loved ones while going over your spending limit.
2. You’re constantly racking up credit card bills
A credit card is a lifesaver, especially for indulgences and additional spending such as on gifts and presents, but if you’re using your credit card and nothing else to buy these presents, you might need to slow down. Excessive debt and inability to repay it or clear your bills on time can and will get you a bad credit score. It’s important that you use cash, take advantage of points, coupons, and other perks in order to cut down your spending.
3. You didn’t start out with a budget
A budget is probably the first thing you should get to before you start shopping for the holidays! If you haven’t already, you’re making a mistake and run the risk of overspending, which is why you need to set a cap on how much you’re able to save more. A budget helps you focus on other things as well, including bills and monthly payments alongside your shopping and indulgences. It’s not too late to create a budget and hold off on any further purchases before you sort this out.
4. You’re impulse buying and indulging
Apart from having no budget and buying things at random, another common mistake that a lot of us are guilty of is impulse buying. Not having a clear list of presents and things you need, lacking a definitive budget, and having access to a credit card is a recipe for disaster, and it can be difficult to resist temptation. After all, these deals look too good to be true, right? It’s because they are!
Spending during the holidays is unavoidable, whether it’s on presents, food or other personal expenses, but you need to make sure you’re not damaging your credit score. Work with our credit repair service for clients across the USA to improve your score and remove negative items from your report, as we help you improve your financial health. Contact us today!