Your Money

It’s the gift-giving season –
and the spending season
Most of us look forward to all the joys of the season – family, parties, spiritual fulfillment, food, gifts, etc. But many of these holiday extras cost money. How do we manage the celebration while managing the budget?

It’s a good idea to take some time to remind ourselves of what lies ahead during the next month so that we don’t get caught up in a mad rush of holiday spending.

Safeguard your credit cards
Today, many of us shop online for our purchases. But, for those of us who enjoy the trips to the mall to take in the whole holiday experience, there are others who are poised to take advantage of the season for their own gain. Here are some reminders to help safeguard your credit cards.

• Don’t take all your credit cards with you when you shop. Take only the card or cards you will use. It’s easier to keep track of one or two cards than five or six. And, you are more likely to stick to your holiday budget.
• While standing in the checkout line, protect your card. Don’t hold it in plain sight where others have the opportunity to take note of numbers and expiration dates. Keep it in your wallet until you actually are ready to give it to the cashier. And, keep your wallet in a safe place where it cannot be easily stolen by a pickpocket.
• Know where your card is. With crowds lining up all around the stores, it’s easy to be rushed and lose track of your card. Be sure you get it back from the sales clerk and take note of the transaction. You don’t want to be charged for something you didn’t buy.
• Check your receipts. Keep all your receipts in one safe place so no one can get your credit card number from them. And, when you get home, keep all your receipts together so you can track your spending and have them handy if a gift needs to be exchanged.
• Go over your credit card statements. Whether you’ve shopped in a mall or online, double-check your statements to be sure no one else obtained your account information and went on a spending spree.

Beware of holiday debt
Gift-giving is often part of the whole holiday package. It’s easy to get swept up in finding the perfect gift for everyone on your list. However, that can easily lead to getting over your head in debt. Think about the following advice before you head out the door to shop:

• Create a budget. Be sure this is a realistic figure of what you can afford and then stick to it.
• Have a credit plan. If you are planning to use a credit card for holiday shopping, develop a plan as to how much you will put on a credit card and how you will pay off the balance.
• Make a list. Those impulse purchases can wreck your budget. Always shop with a list.
• Shop efficiently and leisurely. Last-minute shopping can lead to impulse buying, which leads to more debt.
• Track your purchases. Your purchases can add up quickly, especially during the holidays. Monitor your receipts, adding them up as you go along to help avoid overspending.

If you find yourself in more debt than you realize after the first of the year, here’s what to do:

• Add it up. Know how much you owe by adding up all your credit card debt and other bills so you have an accurate number in front of you.
• Create a repayment plan. Decide what needs to be paid first and plan how you will use your income to accommodate the debts.
• Build a savings cushion. The goal is to have enough money saved to cover your living expenses for three to six months.
• Pay off those credit cards. Not only should you pay off the high-interest credit cards, but you should stop making new charges.
• Develop a financial strategy for the future. Monitor your finances regularly. Open a retirement fund, such as a Royal Neighbors annuity, and don’t ignore it – contribute to it.

Make the most of your holiday bonus
You’re not the only one giving gifts at this time of year. As employers review the year’s successes, they may be in the giving mood, too...which means you may receive a holiday bonus. If you are one of the fortunate ones who will have some extra money soon, make the most of it!

It may be tempting to spend your bonus on a big-screen TV or major shopping spree at the mall, but there may be better uses for your bonus.

• Pay down your debt. Reducing your high-interest debt should be your first priority. Begin with your credit cards and then move on to any personal loans you may have.
• Save what you can. Put part of your bonus into a tax-advantaged retirement account or personal savings account. Increase your 401(k) contribution or maximize an IRA.
• If you don’t already have one, create an emergency fund. It’s recommended that you have at least three months of living expenses saved in case of an emergency. And if you have children, increase it to six months.
• Give yourself a reward. It’s OK to reward yourself for your hard work with a special gift or short vacation. Just be sure it’s reasonable.
• Protect your family. If you don’t already have some form of life insurance to help your family members continue their lifestyle if something should happen to you, use part of your bonus to purchase insurance protection. Call (866) 845-6665, and one of Royal Neighbors’ licensed agents will help determine what you need. If you already have coverage with Royal Neighbors, be sure it still fits your family’s current needs.

10 gift ideas for under $50
If you’re looking for gift ideas that won’t set your budget on its ear, read on! You’re sure to find the perfect present for the perfect person – and you might just have money left over for a cup of coffee and a piece of fruitcake.

Use your holiday bonus to protect your family by purchasing a Single Premium Deferred Annuity, Ultimate Universal Life insurance, or another product from Royal Neighbors that is suitable for you. Call (866) 845-6665 for more information.