Innovative banking products can help you control your holiday spending

Spotlight On Finance

— Of course, technology is only a tool. It doesn’t change the fundamentals of money management—budgeting, saving, investing—it simply makes it easier to do so.

Save money by making smarter decisions

According to a 2012 study by retail marketing group OPOAI, 76 percent of the average shopper’s decisions are made in the store aisle. Technology can help make it easier to make better decisions by making our financial information more readily available, but it’s still up to us to process that information, control our emotions and understand the impact of our spending on our overall financial plan.

That’s right, even with the power of the world at our fingertips, we still need a plan. So sit down and grab a pen and piece of paper, or open your note-taking app on your smartphone or tablet. Make a list of every possible expense this holiday season, from gifts to entertaining, and then look at your budget. A little splurge here and there is okay, but you don’t want to put yourself in the position of paying for your holiday extravagance six months, one year, or three years down the road. When you shop, shop with purpose—to fulfill a need on your list.

Busting your holiday spending budget is like the snowball effect. Once the floodgates are open, people tend to just spend more. In the past, all we had is a plan, hopefully, and our willpower, which is admittedly weak, to keep things under control. For most people, this hasn’t been enough. This year, with technology and the power of now in our hand, we can be better equipped to do a better job.

Hugh Donlon is president of KeyBank’s Capital Region. He may be reached at either 518-257-8618 or hugh_donlon@keybank.com.

Tips for making this holiday season more affordable

There are two big reasons people overspend during the holiday season: one, they overlook expenses, and two, they use credit cards to make their purchases.

According to the Daily Worth, people who use credit cards to make purchases underestimate the amount they spend by an average of 30 percent.

To avoid overspending and the need for credit card purchases, make a list:

  • Who will you be giving to, and how much will you spend on them?
  • What charities will you support, and how much will you donate?
  • Who will you entertain, and how much will hosting them cost?
  • What are your other expenses?

Look for ways to save money. Get crafty and personal with gifts. Donate your time instead of money to a nonprofit. If you’re hosting parties, what can guests bring to contribute, especially if it is family and close friends?

Also, don’t overlook non-gift expenses. Do you go Clark Griswold style from the movie Christmas Vacation and run up costs with your lighting display electric bill and decorations? What about wrapping paper? Many stores offer free wrapping as a courtesy. And if you travel, don’t fail to account for fuel, tolls, and ticket fares.

By putting together a comprehensive list, you’ll have a very good handle on what your expenses are going to be and what you can afford.

If you do have to use a credit card this holiday season, choose a card that offers valuable rewards. There are many cards with many benefits. Which benefits are meaningful to you—cash back, miles, etc.—will be based on your own individual preferences. Also use a card with favorable borrowing terms.

If you use your bank debit card, be sure to track your account balance and transactions regularly. If your bank has a rewards program, enroll in it. For example, KeyBank Relationship Rewards allows customers to earn points through everyday banking activities such as Bill Pay, automated debits and credits, direct deposits and debit card purchases. Use mobile banking apps and text alerts to provide you with up-to-the-minute information. For more details, visit your bank and talk to your relationship manager about what programs and tools are available to you.

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