Avoid the January Credit Card Shock

Ah, Christmas. Snow is on the ground, there’s a frost in the air, lights are twinkling everywhere—and your credit card is still smoking hot from its work-out!

Christmas comes reliably at the same time each year—your best plan is to, well, plan for it! Planning and budgeting doesn’t sound too fun or “Christmas Spirit-y,” but your financial health doesn’t take a vacation over the holidays. You can start your planning and budgeting early, and make it as painless as possible by paying for some gifts each payday for a couple of months before Christmas.

Make a plan and stick to it. Make a budget and stick to it. Do as much you can by yourself instead of hiring people. Keep it simple. Think about last year and what worked and what didn’t—what did you and your family enjoy, and what did you pay money for that you really didn’t need? Was there far too much food and treats, and, well, everything?

Here's a video on Christmas budgeting for your family. 

If you’re buying for everyone in the family (and their dog), maybe it’s time to adjust gift-giving to something like a Secret Santa, or move to homemade or thrifted gifts. Were there things you could do as family experiences instead of paying money for something? Get creative! And communicate—you might be living up to (and paying for!) expectations that simply aren’t real.

Keep an eye on your credit card spending, too. It’s so easy to use credit cards—just *tap* and take your purchase home (or click!), but come mid-January, you can have a shock that you really don’t want. If you can pay your credit card off in full and take no hit on the interest, that is ideal—if you have to carry a balance, that’s when you start getting into trouble. If you couldn’t afford it in December, will you really be able to afford it in January or February?

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.