December is a key month in terms of personal finance. Although it is a season of many expenses due to Christmas gifts or the holidays of the time, New Year’s dinner and vacation planning, the pocket also receives extra income from the Christmas bonus, annual tax awards by companies or higher profits due to increased business sales. That’s why it’s a great time to organize your finances.
In short, it is a month of financial inputs and outputs that requires special accounting, but that not everyone knows how to control. However, this complex situation can be changed in our favor.
Also, the end of the year is a good time to stop along the way and rethink the financial situation, repairing mistakes made during the previous months and setting financial goals for the coming year. We give you some recommendations that will help you balance your economy and start 2023 on the right foot.
Bonus
It is extra money that you do not have regularly, therefore it must be used wisely. For this reason, you should give priority to pending debts, insurance, and paying off or amortizing credits, because there are commitments in which that money can be very useful.
When deciding what to spend on, experts recommend the cap system (Payment of debts – Savings and investment and reduce Consumption, giving priority to the payment of pending debts -by 40%-). If you comply with this plan, you will see the fruits of your bonus.
Budget
According to the Condusef, not making a budget can be risky, because at this time you will have a greater number of temptations and not knowing how to manage them could lead you to financial failure. It is important to make a list of all the things you want or should buy together with all the members of the household, this will allow you to have a much broader vision of the needs of both you and your family. For example, dinners are not considered a major expense, although they are. Experts recommend that the expenses of these meals be distributed among each member of the family group that receives income.
It is important that you budget based on how much you can spend and not how much you want to spend, this will prevent you from making impulsive and unnecessary expenses that will produce new debts for the next year.
purchase control
It is essential not to let yourself be absorbed by the avalanche of offers and promotions on the market.
In this regard, the Condusef says that you must acquire those things that benefit you over time. An example may be opting for the purchase of an efficient kitchen or washing machine, that is, replacing your old appliances with ones that allow you to save energy, before other things. Someone impulsive consumes disposable things that, over time, only produce imbalances in your economy.
Credit cards
It does not matter if you have three or four credit cards, try to use only one of them for the purchase of gifts, decoration or travel expenses this season.
However, the first option will always be cash. As for the payment of debts in plastics, always prefer the debt that most presses you or the one that you can finish paying off faster. If you are looking for monthly interest promotions, it can be a good option to save, but you should make sure that they include a 0% rate or at least a very low one. If you pay a lot of interest, in the long run, this “promotion” will make you spend much more.
Other recommendations
- Avoid making the two main year-end mistakes: over-indebtedness and asking or lending money to someone.
- Compare as many prices before making a purchase. The market is wide and the offers vary greatly. In this season it is essential that you do your shopping on time.
- Save at least 30% of your Christmas bonus and deposit it in an account that you can’t access until after January.
