All the Mistakes You Make With Your Money In December… and How to Prevent Them

You don't want to be a financial disaster in January, so here are some tips on how you can manage your finances in the face of Christmas shopping.
All the Mistakes You Make With Your Money In December… and How to Prevent Them
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  • Spend the entire bonus.
  • Go shopping dancing like Heidi in the meadow (no budget).
  • Gathering too many expenses too fast.

Like every year in Mexico, the Christmas decoration appeared almost exactly with that of the Day of the Dead. Some complained and others, although they claimed not to agree, began to buy decorations for the tree in October.

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

Finally, what the realists always thought and what the optimists still deny happened: we are going to celebrate the new year with the virus looming over the roofs of our houses.

But, of course, outside, life goes on, banks go on and, of course, Christmas plans continue. So, however life has changed this year, we want to give you some advice on personal finance adapted to 2020, so that you arrive in January with money.

Mistake No.1: Spending the entire Christmas bonus

Every year the finance content tells you the same thing: "Don't spend the Christmas bonus, save 30%" and the people who always do it, save it and live calmly, and those who never do, spend it all again and they bite their nails when January comes.

Image: Damir Spanic via Unsplash

In 2020 things are different, and the reality is that you cannot deny the reality: this year, although it deserves that Christmas last two months, it also requires you to be extra careful with expenses.

The economy is "depressed" according to experts and gurus. If you think that the situation is not so serious, taking advantage of the fact that you are going to the shopping center, look at the number of closed stores. You may also have noticed that there are stores on permanent recess or that your favorite taco stand is no more.

2020 has changed things and even though your income is stable, things around you may not.

In other words, if there is a time for you to watch your money, this is it.

How to prevent it:

When your Christmas bonus comes, set aside 30% automatically, don't even look at it. There are applications and banks that allow you to make "sections", use these tools. For now you don't have to think about anything else, just save it.

In January you can use it to pay for all the expenses that come ( there are always extra expenses in January ) or invest it, we will think about it.

Mistake # 2: Go shopping dancing like Heidi on the meadow (no budget)

Do it, of course you do, go very happy to the shopping center, keep a healthy distance and wear your mask well on ... but do not carry your cards.

There is nothing more dangerous than a " shopping spree " in which you go to buy "until the card quota runs out". It is not normal to do this. People who never suffer for money don't do this.

How to prevent it:

Make a budget:

  1. Grab a notebook or your notes app; If you don't have one, even a napkin will do.

  2. Write down what you must, absolutely must, buy there: gifts for children, appliances, utility products.

  3. Take a first trip to the stores or check online how much these things cost and more or less what you would like 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 worn off and you decide not to buy half of the items.

Making a list and not rushing to buy the first thing you see guarantees that you will cut your expenses by almost half, since a large percentage of what you buy corresponds to "impulse".

Buy early and compare a lot. There is always something that fits your budget. For example, something may be 50 pesos more expensive on Amazon, but how much will the "associated purchases" cost you if you don't know how to control yourself at the mall?

Image: Corinne Kutz via Unsplash

Mistake No.3: Gathering too many expenses too quickly

It is common for December to give us the interest of perfection, so we not only want to have the perfect little tree with added led lights, but also the perfect crockery, the perfect floor and the perfect bedding. And, of course, the Kings, Santa and the Child Jesus cannot be left behind, so we want to give the best gifts to children. A survey revealed that 90% of people plan to spend on household items and toys this December. Therefore, it is common that, when December 15 arrives, most people have to borrow for Christmas dinner.

How to prevent it:

Make a list (yes, in finance, lists are your best friends) with the things you want to buy this December. Don't buy yet. Ask yourself what is absolutely necessary in this fortnight, and spend on that. If it's the first half of December, maybe you don't absolutely need to buy Christmas dinnerware now. And remember that the kings arrive until January and that the promotions after December 24 are also good, so you can afford to wait.

Mistake # 4: Underestimating December Spending

Do not be so innocent when you think, again, that Christmas expenses are reduced to gifts and the occasional purchase of clothes to be released on the 31st. December and January involve many more expenses, such as food, corporate or engagement gifts, Outings and celebrations (which this year will be less, but there will be), such as posadas. And don't forget that your employees and help staff at home should also receive a bonus and some tokens of your appreciation.

How to prevent it:

With the list! Making a list of all those expenses that you know will come, but that you refuse to put in your budget. By making this list of expenses associated with December, you may open your eyes and decide to adjust your budget and, in this way, you may be able to reach January with money.

Mistake No.5: Being in denial: not thinking 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 simple denial.

Image: Volodymyr Hryshchenko via Unsplash.

How to prevent it:

Make clear accounts of what you spend in December with all means of payment: cards and cash. Keep a clear record, even if you are afraid, because it is the only way that the snowball of your debts remains manual size and not avalanche.

Do you make 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 this December?

Don't be afraid to ask yourself questions about your finances. Recognizing them and deciding to improve them is the first step to start building and protecting your heritage.

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