Best Ways to Pay for Holiday Expenses

Let’s face it, the holiday season can be expense.  And, for many of us, our day-to-day budget can’t simply absorb those additional expenses.  This could leave us with a shortage of cash during what should be the happiest time of the year. 

Don’t panic.  Let’s explore the best options for covering holiday expenses…

1. Use savings:

   In a perfect world, you’ve had the ability to save money throughout the year to cover your holiday expenses.  Using savings has two distinct benefits: (1) your day-to-day budget won’t be strained, and (2) you won’t need to borrow money and pay interest.
   
   

   It may be too late to save for this year’s holiday season, but it’s never too early to start planning for 2024.  Products like Spare Change Savings are a great place to start, but using digital banking to set up an automatic recurring transfer to your savings is likely your best bet. 

   Here’s how it works:

   Take the amount you’d like to have for your holiday budget, then divide that figure by the number of paychecks you’ll receive before Christmas 2024.  For example, $1,000 budget divided by 20 paychecks, means you need to save $50/bi-weekly.  In digital banking, schedule a recurring transfer of $50 to take place every two-weeks on your payday.
   
   

2. Holiday Loan:

   If you need to borrow money for holiday expenses, a Holiday Loan from Adventure Credit Union is a good option! A Holiday Loan has three distinct advantages over your typical credit card:
   • Pay less interest: our Holiday Loan features an interest rate as low as 9.99% APR.*Compare that to the national average credit card rate of 21.09% APR.**
   • Fixed loan repayment: unlike a credit card, our Holiday Loan has a 12-month repayment term.  This makes budgeting and paying off debt easier (and potentially faster).
   • Fixed loan amount: Our Holiday Loan typically ranges from $500 to $2,500.  The money is disbursed to your account in one lump sum.  This eliminates the temptation to overspend!
   • No payments until 2024: our Holiday Loan doesn’t require any payments for the first 90-days.
     
     

3. Credit Cards:

   Reaching for one of the credit cards already in your wallet is a convenient and tempting option.  However, as previously discussed, credit cards have their own pitfalls.  If you’re going to use a credit card for holiday expenses, please do the following…
   • Choose a low interest card like a VISA from Adventure Credit Union.
   • Set a limit for your holiday expenses and stick to it!
   • Have a plan in place for paying off your debt so it doesn’t snowball.

There you have it, three options for covering your holiday expenses.  Please notice that “payday loans” is not on the list.  If you are ever considering a payday loan, please contact us, first.  Our Trusted Financial Guides want to help you avoid this common financial misstep.