GREENSBORO, N.C. — It's the most wonderful time of the year...to plan your finances ahead of the holidays!
You may not be thinking about Christmas just yet, but when it comes to your wallet, financial experts say it's a great time to make a financial plan.
For this 2 Wants To Know Q&A segment, we spoke with Financial Planner Scott Braddock.
He says to avoid the anxiety of finding the perfect gift, you and your wallet will be better off starting now.
HAVE A PLAN
Braddock says a successful shopping plan starts with creating a spending plan, especially since sales are starting earlier and earlier each year.
Be detailed, he also advises. "Look at your budget to determine how much you can afford to spend this holiday season. Then list each person you need to buy gifts for and how much you want to spend on them," Braddock said.
Finally, budget for the extras - like shipping, wrapping paper, and decorations.
GIVE A GIFT THAT LASTS
One gift idea is to contribute to your child's or grandchild's future education through a 529 plan.
"This money won’t be taxed as long as it’s used to pay for approved educational expenses, like tuition, fees, books, supplies and room and board," he said.
Braddock also suggests setting up a checking or savings account to start teaching kids about finances.
Lastly, remember that handmade gifts and cards are always great, thoughtful, and inexpensive.
DON'T FORGET ABOUT YOU
Braddock says he doesn't necessarily mean go out and buy a new TV or a home gym.
"Instead, commit to your financial future by setting money aside to replenish your emergency fund or pay off debt," he said.
WHAT CAN WE DO TO START SAVING MORE MONEY?
First, get your free money. According to SmartAsset, one in three Americans leave free money on the table by not taking full advantage of their employer's 401(k) match.
Investopedia says the average employer match is 4.3%.
Braddock recommends contributing 10-15% of every paycheck to your 401(k). But if you can't, at least contribute enough so you can get the company match.
Second, reduce withholding at work.
"If you’re waiting for your tax refund each spring, consider changing your withholding to benefit your finances year-round. You won’t get as big of a refund, but you will get more in each paycheck throughout the year," Braddock said.
You can make this change anytime by filling out a new W-4.
Third, negotiate your bills.
Negotiate your bills for your cell phone, internet, or streaming service provider.
According to the Motley Fool, some companies are 80% more likely to give you a lower rate if you call and negotiate.
It's also worth a call to your auto insurance company. You might be able to get a lower rate based on your job, the age of your car, or other information.
If you're struggling to pay off credit card debt, call the credit card company. According to Investopedia, a majority of cardholders got a late fee waived or a lower interest rate just for taking the time to call and ask.
DON'T TAKE ON MORE DEBT
There are two great methods to tackle your debt.
Snowball - Organize your debt by the amount you owe and tackle your smallest balance first. Then tackle your next smallest balance. Like a snowball rolling down a hill, this method helps you build momentum until all debts are paid.
Avalanche - This method prioritizes paying off high-interest debt first.