Decide Holiday Budget:
According to market research, the goal of consumers is to spend more this year than last. Often, this leads to more credit card debt. Don’t do it! End-of-year is a great time to make a budget. For couples or families, it's especially important to agree on the amount to spend on holiday gifts.
Pay Off Debt:
The average U.S. household owes $34,000 in credit card and auto loan debt. Whether it's a hill or mountain of debt, it can be paid off. Start with a small credit card debt and pay it off.
Save for the Future:
If you haven’t already, start saving for retirement, kids' college and emergencies. Many employers offer 401(k) matches. If you contribute to a 401(k) savings plan, employers will match it, up to a certain amount. (If you put 3% of your paycheck into the 401(k), they’ll put the same amount into your account.) Make the contribution automatic by having it taken it out of the paycheck before you see it.
Budget, Budget, Budget:
A budget is a tool to manage spending. It tells the story of what and how much a person or family plans to spend their money on. A simple budget method is to create envelopes for food, clothes, gas, medical expenses, etc. Paychecks are cashed and divided between envelopes, based on the budget. When the envelopes are empty, the budget is gone. It takes away the credit card debt, which is a win to eliminating debt. A budget is important for paying off debt and saving.
As you pay off a credit card, or have money left at the end of the month, celebrate the accomplishment with a movie night or a meal out. The celebration of success is an important part of successful financial management.