Three Holiday Spending Tips

Whether you’re planning for Christmas, Hanukkah, a big New Year’s Eve party, a trip to visit family or friends, or a winter vacation, the time is now to get your finances in order to avoid debt and regrets that can lead to the holiday blues. The season of gift-giving and fellowship too often creates the spirit of giving far beyond what you can realistically afford. But if you start now you can be holiday guilt- and debt-free for the New Year. Here are three tips to help you stay on track. 1. Create Expectations and Family Buy-In.You may have a magic budget number in mind, but unless everyone is willing to stick to it, then the target is useless. The key is to communicate with family members and begin planning now to avoid last-minute weaknesses and over-buying. Minimal lifestyle changes such as skipping dessert in a restaurant, packing a lunch, or renting fewer movies can help save money that can be earmarked for the holidays. Kids can contribute to a coin jar and learn about the value of saving as well.

2. Make a List & Definitely Check it Twice.Record everyone on your gift-giving list and be sure to check it twice. Set recommended amounts and then keep track of spending along the way. Recognize that over-spending in one area means that you must reduce costs in another – a notion that’s easier said than done when you’re in the throes of the holiday spirit. Check your list for necessities and consider changing the amount of a gift if your budget is looking tight. Remember that it really is the thought that counts! 3. Say No to Last-Minute Temptations. Stores know the temptation of exquisite decor displays and fabulous clothing that lead to impulse purchases and, with it, a case of buyer’s guilt later. Be strong and don’t give in. A pass on that $100 lush velvet skirt today may ultimately lead to a much happier and financially-fit spring season next year. A general guide: if it’s not on your “approved” list, then the answer is no. Exceptions can occur, of course, on last-minute party invites or occasions, but keep close watch on overall costs.

Refinancing to Ease Holiday Spending Woes

Planning ahead really can save you money down the road. And with the high-cost holiday gift-buying and entertaining season quickly approaching, this may be the perfect time to refinance your mortgage and free up some money instead of relying on high-interest credit cards. You may find that taking equity out of your home will help bring joy back into your holiday season – and start the New Year off on a debt-free note, as you may also be able to use some of the equity in your home to pay off high-interest debt such as your credit card balances. This will enable you to put more money in your bank account each month. And since interest rates continue to hover near historic lows, switching to a lower rate may save you a lot of money – possibly thousands of dollars per year. There are penalties for paying your mortgage loan out prior to renewal, but these could be offset by the lower rates and extra money you could acquire through a refinance. I can sit down with you and work through all of the equations to ensure this is the right move for you. With access to more money, you’ll be better able to manage both your holiday spending and existing debt. Refinancing your mortgage and taking some existing equity out could also enable you to do many things you’ve been

longing to accomplish – such as purchasing an investment property, taking that well-deserved vacation, renovating your home or even investing in your children’s education. Paying your mortgage down faster By refinancing, you may extend the time it will take to pay off your mortgage, but there are many ways to pay down your mortgage sooner to save you thousands of dollars in interest payments. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money. You can also increase the frequency of your mortgage payments by opting for accelerated bi-weekly payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. By refinancing now – before the holiday season is in full swing – and planning ahead, you can put yourself and your family in a better financial position. As always, if you have any questions about refinancing, reducing debt or paying down your mortgage quicker, I’m here to help!