Get Your Budget 2020 Ready

Once again, the new year is almost upon us. If your family is anything like ours, money is almost literally flying out of the windows as everyone prepares for Christmas and New Year celebrations. What’s worse, is that much of this spending is on credit, overdrafts, and cards.

It truly is a magical time of the year for retailers. According to ABC News, Americans will spend a total of around $460 billion this holiday season. However, this article doesn’t touch on the financial impact on families that are overspending. It can cause year-round worries.

Why is Holiday Spending Out of Control?

The simple answer seems to be that it’s pretty much because of media hype. There are billions invested in marketing annually to make sure that people see the things they want. However, much of this marketing also uses manipulation to make people feel like they must spend and overindulge.

They create images of tight people, sad children, and guilt scenarios to persuade people to spend more. It isn’t enough that you simply buy a gift anymore, but that your gift should be of equal value or preferably higher value than the one you receive.

This kind of holiday needs to be toned down a bit if you want to get back in control of your budget. After all, a gift that is thoughtful is often more cherished than something that’s simply expensive.

How to Reduce the Spending

The first step to a good budget for 2020 is not to overspend in 2019. So, here we look at some ways to get holiday spending in line.

  • Set a budget and make yourself stick to it
  • Get the family on a budget too
  • Use points and coupons you have from before
  • Compare prices and take advantage of price guarantees
  • Don’t use every shopping trip as an excuse for meals out
  • Consider buying more generic brands (depending on the product)

These steps can help to cut your holiday spending be a significant amount. This especially applies to food and drink shopping, where many store brands are just as good and more affordable. The key is to think before buying, as impulse buying is a dangerous game.

Getting Your 2020 Budget Together

Keeping finances on track isn’t an easy task. If it was, there wouldn’t be so many companies in the business of providing credit. However, there are ways to do it and there are ways to use that credit to help you get things inline.

When you first start a budget, it won’t feel easy. It takes time to adjust and to make budgeting a positive habit. However, with time, the process becomes easier. This is why we suggest that when you start a budget you make it a gradual transition. Don’t simply jump in and try to cut out everything, stagger the budget stages over months or even an entire year.

If you have debts or are living paycheck to paycheck, you may also want to consider refinancing first. A bank loan or title loan will likely have better interest rates than existing credit cards and overdrafts. By combining all your debts into an easier to manage monthly payment, you reduce interest rates and make life simpler to manage.

Once you get on top of the debt, try to set money aside. In the beginning, it doesn’t need to be a lot, it just needs to be something. This is to start the habit of saving, even if just a little bit at first. Long term, a small amount weekly will add up to a decent sum of money,

Once you clear your debts or start to get close, the next step is to look ahead. Instead of blindly stumbling from paycheck to paycheck, look ahead 5-10 years and try to imagine and plan for what is coming. Depending on your situation, this may be school fees, mortgage repayment, a new car or any other significant expenses.

To Conclude

Now you have a plan together, try to save and invest to ‘more than cover’ what is coming. Look into investments, high-interest savings, pension top-ups and other ways to increase your worth. The “older you” will want to thank the “younger you” if you make a success of this. It’s no fun to be juggling debts and bills in your 60s and 70s.

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