Tis’ the season for holiday shopping, so it’s a good idea to have a holiday savings budget in place before you purchase too many presents. This year is going to be especially taxing, with sky-high inflation deflating your spending power. To mitigate any spending hangover before the new year, Camino has 3 tips for 2022 holiday savings.
1. Make a Holiday Savings Budget and Stick to It
It’s easy to get carried away with the joy of gift-giving. Many holiday shoppers try to justify spending a little extra here and there and not sticking to their original gift list. A great budget strategy, called the 50-30-20 rule, is to allocate 50% of your income to everyday essentials, 30% to discretionary items, and save 20% of your earnings. It’s important to note, these numbers should be calculated by using your net income or take-home pay, after taxes and other deductions.
Now that you have a general budget, you need to pare it down for your holiday spending. It’s a good idea to organize your list into categories like gifts, food and entertainment, travel, and decorations, etc. To achieve more holiday savings, budget for each of these slices of your holiday spending pie and stick with it.
2. Consider Acquiring a Personal Loan
When considering borrowing options to help pay for your holiday spending, some people overlook the benefits of obtaining a personal loan. Getting a personal loan offers great interest rates and is a great way to avoid falling into credit card debt with high interest and fees. Instead, you’ll find a personal loan provides holiday savings. As a not-for-profit credit union, Camino is able to offer comparably lower rates that can be repaid in 24 to 60 months. With our lower fixed-interest borrowing options, you’ll pay back the same amount each month, so it makes it easy to budget your overall spending every month. And you’ll conveniently receive your payment in one lump sum that gets paid upfront once your personal loan is approved, typically $1,000 to $30,000.
3. Avoid Credit Card Debt
As we continue to experience prices skyrocketing on everything, it might be tempting to rely on your credit cards to cover your holiday gifts and expenses. However, since the Federal Reserve has continued to raise interest rates this year to help fight inflation, credit card debt has become more expensive and can be difficult to pay off. This holiday season, it’s important to try and pay off your credit card balance each month to avoid paying more interest. If you do have to use a credit card, use one with the lowest interest rate, and try to pay your balance as soon as possible.
Need Help with Your Holiday Savings? Contact Camino Today!
Meet with a Camino Member Advisor today to help with a savings plan for the holidays or any time of year. We’ll help you with your financial journey. We want our members to find the savings option that works for them. Please go online at caminofcu.org, give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information.