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Are you on Santa’s nice or naughty financial list?

The following is a guest post.

He knows when you’ve been sleeping, he knows when you’re awake and he even knows when you make poor financial choices. With Christmas coming, it is time to take stock of your financial situation.

Santa Claus might have hundreds of elves working round-the-clock to make toys and gifts, but you are not awarded that same luxury. Instead, you find yourself piling up gifts on your credit card.  By the time the holidays pass, everything from your savings accounts to your credit cards is a black hole. Though you might think you cannot escape, you can make sure that it never happens again.

A Christmas account is a savings account also known as a Christmas club account. Every time you deposit a paycheck into your bank account, a small percentage goes into a separate account.  This type of account is especially helpful for procrastinators that typically wait until the last minute. The money continues growing and earns interest, giving you a nice sum for spending during the holidays.

Even if Christmas is right around the corner, you can still remove yourself from Santa’s naughty list. The trick is to keep an eye on your finances and only spend what you can afford.

Make a list of those that you typically give gifts to, including yearly tips to the mailman, newspaper boy and other delivery workers. Add any charitable donations you typically make.  Charitable donations come with the advantage of reducing any taxes owed. If you cannot afford a donation this year, avoid making a donation.

When it comes to gifts, look for people that you can remove from the list. You can also give out smaller gifts or create your own gifts.  Making brownies and other baked goods or creating your own jellies keeps your savings accounts in good standing. You still have a gift for everyone on your list, but spend less money in the process.

You might also make Santa’s naughty list by poor choices throughout the year. Christmas is the perfect time to go through your finances and get the next year off to a good start.  Take stock of what you have, including the amount in your savings accounts and checking account. Gather all of your bills and add up how much you owe to all creditors.  Write out the maximum amount you can afford to send to each creditor and how long it will take to pay back the loans. Go over your finances, looking for ways to reduce spending and increase the amount you send.

It is important that you take stock at least once a year. You might find it helpful to go over your finances every few months, as your spending habits change.  The more money you save early in the year, the more money you have for Christmas. You also find yourself in good financial standing and Santa takes you off his naughty list.

Not everyone has the same financial situation, even those that make the same income. Only you can preserve your financial future by making the right decisions today.

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