Homeownership and Holiday Expenses

The holidays will be here soon! This is the time of year when we celebrate with our closest friends and family.  These moments are precious, and we want them to be as stress-free and enjoyable as possible.  Often times, the holidays set our savings back, or we end up maxing out our credit cards.  January rolls around, we open our bank and credit card statements and start planning to play catch up.

What kind of expenses do you normally have during the holidays?  Have you already made your holiday plans?  If not, now is a good time to make a list of all of your holiday expenses.  Then, set a budget that will give you a specific plan to follow.  This plan will help you maintain control over your money, and you will be less likely to make unplanned purchases.  You will enjoy a great holiday season and stay on track for important financial goals such as home purchase.  Here is a list of common holiday expenses to consider:

• Travel:  How much is the cost of air fare?  Are you traveling by car?  What will gas cost you?  
  The AAA Fuel Cost Calculator can help you budget your gas expense based on your destination and vehicle type.  Keep your gas expense in mind and save a little extra to meet this cost without draining your savings.

• Food:  Will you and your family eat in restaurants during the holidays?  Will you be responsible for the hosting and cooking?  
  If you and your family will be eating in restaurants, set a specific cost per meal, per day for you and your family.  Keep this number in mind as you are choosing a restaurant.  If you and your family are hosting the holiday meals, think about the number of people you will be entertaining, plan the type of meal you will cook, and then set a budget for the meal.  This will help prevent you from purchasing items you don’t need at the grocery store.  If you have a big family, try buying in bulk or having a potluck meal.  Potlucks are a great way to share expenses and favorite dishes!

• Gifts:  How many people will you buy for this year?  How much do you plan to spend?  
  Make a complete list of all the people you plan to give gifts to this year.  Don’t forget to hit the sales!  If you are worried that gift-giving will break your budget, write a nice holiday card to your loved ones and let them know that you plan to buy a home next year.  They will be excited for you and happy to support your goal.  Include in your note that instead of store-bought gifts this year, you will be giving all of your loved ones a homemade item.  If you don’t feel crafty, give the gift of your time.  Offer free babysitting, pet-sitting, lawn-cleaning, snow-shoveling, or make them a favorite treat.  Homemade gifts are personal and affordable. 

Remember to make a plan before you spend.  Unplanned purchases can hurt our savings and our credit scores.  You will need savings for your down payment and maxing out your credit cards will negatively impact your credit score.  Don’t let holiday spending cost you your dream of homeownership!