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A list of goals for financial well-being.

With the holiday season approaching, it is vital to consider ways to save money and not end up creating new debt. Developing some type of spending plan is essential to helping individuals manage their income. Be smart about your spending this holiday season. Below is a list of 10 things that can help lead you to financial success.

  1. Spend less than you earn. Keep a budget or spending plan and track your spending to avoid overspending.
  2. Have a plan. Get organized and write down your immediate, short-term, intermediate, and long-term financial goals. This can be your roadmap to follow in order to stay on track. Remember, if you do not have a plan, you are more likely not to reach a goal.
  3. Prepare for expected events. Save in advance for upcoming seasonal events. Holiday seasons will come and go but financial obligations will remain. Make sure your bills are paid on time. This will help to improve your credit score.
  4. Prepare for unexpected events. Due to seasonal and holiday excitement, it is easy to overspend. Make an effort to put some money aside, if you have not already done so, for emergencies. You never know what can happen suddenly such as job loss, sickness, etc. A great way to do this by saving any lump sum payments/windfalls you may receive such as tax refunds, gifts, or inheritance. Another way to be prepared for the unexpected is by having the adequate amount of health, car, home, and life insurance.
  5. Always know your interest rates. Be aware of the purchase savings in exchange for a store credit card, if approved. This is where customers are offered a certain percentage, such as 10 to 20 percent, off their purchase in exchange for having their credit checked to see if they qualify for a store credit card. Keep in mind that each time an inquiry is made concerning your credit worthiness, your credit score drops by a few points whether approved or disapproved. If you are trying to build your credit, this would not be a wise decision. Never exceed 13 percent interest on loans and know what you pay in interest and fees. Know how your interest is being calculated.
  6. Keep a healthy credit report. Your credit score is a number that indicates if you have good credit history. You can improve your credit score by paying your bills on time and by paying off debt. Don’t apply for credit cards frequently. Pay off your balances each month or pay more than the minimal payment. Remember, the goal is to pay off the principal balance as soon as possible to avoid paying a lot of money in interest. Don’t forget that you are entitled to a free annual credit report at www.annualcreditreport.com. You can also access this report by calling 1-877-322-8228 or by mailing an inquiry to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
  7. Avoid waste. Prepare your holiday meals instead of having them catered or eating out. Don’t purchase unnecessary items. Return gifts that know you won’t use or re-gift them.
  8. Take advantage of tax breaks. Tax season begins in every new year. Most people have earned income credit they can claim. To save money, if you qualify (earn up to $55,000) try utilizing your local free Volunteer Income Tax Assistance program (VITA) in your county or a surrounding county.
  9. Fill in the financial gaps. If you are having financial difficulties, try having a garage sale, or sell excess produce at a farmer’s market. Another ideal is to barter goods and services without having to trade cash. Also, you can sell on eBay, recycle, get a part-time job, etc.
  10. Give back to your community. Feel free to donate. Some ideas for tax write offs are donating to the Alabama 4-H, Angel Tree, United Way, Salvation Army, Food Bank, or any other non-profit organizations of your choice.

More Information

AmericanSaves.org is a great resource for those wishing to learn more about financial planning. For more information, contact Theresa Jones, an Alabama Extension resource management regional agent, at rosscth@aces.edu or 256-509-5908.

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