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All the Mistakes You Make With Your Money In December … And How To Avoid Them

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  • Spend the entire bonus.
  • Go shopping like Heidi is dancing in the meadow (no budget).
  • Collecting too many issues too quickly.
All the Mistakes You Make With Your Money In December … And How To Avoid Them
All the Mistakes You Make With Your Money In December … And How To Avoid Them

As every year in Mexico, the Christmas decoration appeared almost exactly with that of the Day of the Dead. Some complained and others, despite claiming disagreement, started buying decorations for the tree in October.

And if there is anything we can say about 2020, it is that it has passed like lightning with its face masks, alcohol gel and limitation.

Finally happened what the realists always thought and what the optimists still deny: we will celebrate the New Year with the virus popping up over the roofs of our homes.

But outside, life goes on, the banks go on and of course the Christmas plans go on. Although life has changed this year, we’d like to give you some personal finance advice adjusted for 2020 so that you arrive with money in January.

Mistake # 1: Spend the entire Christmas bonus

The financial content tells you the same thing every year, “don’t spend the Christmas bonus save 30%” and the people who always do it save and live quietly and those who never spend it all again and you bite on their nails when January comes.

Image: Damir Spanic via Unsplash

2020 will be different, and the reality is that you can’t deny the reality: this year, although it deserves Christmas in the last two months, you will have to be extra careful with spending.

The economy is “depressed” according to experts and gurus. If you think the situation is not that serious and you take advantage of the fact that you are going to the mall, look at the number of stores closed. You may also have noticed that stores are on a permanent hiatus, or that your favorite taco stand is no longer there.

2020 has changed things, and while your income is stable, things around you cannot.

In other words, if you have time to watch your money, this is the time.

How To Prevent It:

When your Christmas bonus comes, automatically set aside 30% and don’t even look at it. There are applications and banks that allow you to create “sections” using these tools. Right now, you don’t have to think about anything else, just save it.

In January you can use it to pay all costs (in January there are always additional costs) or invest it. We’ll think about it.

Mistake # 2: go shopping like Heidi in the meadow (no budget)

Do it, of course do, go to the mall very happy, keep a healthy distance and wear your mask well … but don’t wear your cards.

There is nothing more dangerous than a “shopping spree“Where you will buy” until the card amount is used up. It is not normal to do this. People who never suffer for money don’t.

How To Prevent It:

Make a budget:

  1. Get a notebook or your note-taking app. If you don’t have one, a napkin will do.

  2. Write down what you absolutely have to buy: gifts for children, household appliances, everyday objects.

  3. Take a first foray into the stores or check online to see how much these things cost and more or less what you want to buy. But don’t buy anything yet.

  4. Write down the prices of things in the notebook

  5. See if your budget fits.

By now the “heat” of shopping may have subsided and you decide not to buy half of the items.

If you make a list and don’t rush to buy the first thing you see, you can cut your spend by almost half as a large percentage of your purchases are “impulse”.

Buy early and compare a lot. There is always something that fits your budget. For example, something on Amazon may be 50 pesos more expensive, but how much do the “associated purchases” cost you if you don’t know how to manage yourself in the mall?

Image: Corinne Kutz on Unsplash

Mistake # 3: Collecting too many expenses too quickly

It is common for December to awaken us interest in perfection. That’s why we not only want to have the perfect little tree with additional LED lights, but also the perfect dishes, the perfect floor and the perfect bedding. And of course the Kings, Santa Claus and Baby Jesus cannot be left behind, so we want to give the children the best gifts. A survey found that 90% of people plan to spend on household items and toys this December. As a result, it is common for most people to have to borrow for Christmas dinner on December 15th.

How To Prevent It:

Make a list (yes, in finance, lists are your best friends) of the things you want to buy this December. Don’t buy yet. Ask yourself what is absolutely necessary during those fortnight and spend on it. If it’s the first half of December, you may not need to buy Christmas tableware now. And remember, the Kings will arrive by January and the promotions after December 24th are good too, so you can afford to wait.

Mistake # 4: underestimating the December spending

Don’t be so innocent when you think again that the Christmas cost is reduced to gifts and the occasional purchase of clothes to be released on December 31st and January brings with it a lot more expense, like groceries, company or Engagement gifts. Excursions and celebrations (which will be fewer this year, but there will be) such as posadas. And don’t forget that your home workers and helpers should also receive bonuses and some tokens of appreciation.

How To Prevent It:

With the list! Make a list of all the expenses that you know are about to come but that you don’t want to include in your budget. Making this list of December related expenses can open your eyes and adjust your budget. That way, you can potentially get into January with money.

Mistake # 5: Being in denial: don’t think about January

It is true that Christmas should be enjoyed and that living in the present moment is the key to happiness … but not keeping a record of what you have spent is an easy denial.

Image: Volodymyr Hryshchenko via Unsplash.

How To Prevent It:

Make it clear with all means of payment what you will be spending in December: cards and cash. Keep a clear record even if it scares you, as this is the only way to keep the snowball of your debt manual, not avalanche.

Are you making any of these mistakes in December?

What are you planning to spend on?

Do you have a financial plan?

How will the pandemic change your financial behavior in December?

Don’t be afraid to ask yourself questions about your finances. Recognizing and improving you is the first step in building and protecting your legacy.

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