Money Management

Overspending on the holidays could land you in serious debt. Here’s an easy way to know how much you can afford to shell out. 

Some people will tell you that the holiday shopping season doesn’t really kick off until Black Friday. Others will tell you that it basically encompasses all of November and December up until the 25th.

Whether you’ve started your holiday shopping or not, though, it’s important to be mindful of how much you can afford to spend. A good 51% of U.S. consumers plan to spend over $500 this holiday shopping season, according to data from TransUnion. That may be doable for you, or it may be a stretch.

The last thing you want to do is close out 2023 with a heaping pile of credit card debt. So to avoid that fate, you’ll need to set a shopping budget. Here’s how.

1. See how much money you have in tappable savings

If you have money in your savings account, you may be able to use some of it to cover your holiday purchases. But one thing you don’t want to do is leave yourself with too little money in emergency savings.

As a general rule, your emergency fund should have enough cash to cover three months of essential expenses. So let’s say you spend $2,400 a month on essentials and have $7,500 in the bank. That means you should really leave yourself with $7,200 for emergencies and, as such, consider your first $7,200 in savings off limits. That would give you $300 from savings to work with as a starting point.

2. Figure out how much of your upcoming paychecks you won’t need for essential bills

It’s never a good idea to commit your entire paycheck to essential expenses. Hopefully, you have a little wiggle room to spend money on extras, whether it’s social events, takeout meals, or other things that bring you joy.

What you’ll want to do is take a look at your next few paychecks, figure out how much you need for essential bills, and see what’s left over. So let’s say you determine that between now and Christmas, you’ll have $400 in discretionary cash from your wages. Of that, though, you may want to earmark $200 so you can pay for social outings or buy dinner on those nights when you’re too tired to cook. In that case, you can add $200 to your holiday shopping budget.

3. Determine how much cash back you can squeeze out of your credit cards

Many people bank credit card rewards, rather than using them right away. It pays to do a review of your credit card accounts and see if you have points you can convert to cash back, or to gift cards for stores you want to shop at for the holidays. Whatever that total is, you can add it to your running tab to finalize your holiday shopping budget.

If you’re planning to spend more than $500 on holiday shopping this year, perhaps you can easily afford it. But if not, come up with a number that works for you so you don’t have to start 2024 with a pile of expensive debt.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More 

A brand-new account feature makes your Spotify Premium plan more valuable. Plus, it won’t cost you any extra money. Here’s what you need to know. 

Streaming services have become more prevalent in recent years. While video services like Netflix and Hulu may come to mind first, music streaming services are also an in-demand entertainment option. Top music streaming provider Spotify has a new feature available to some premium users. Find out why your Spotify Premium plan may provide you with more value now.

Introducing Spotify Premium

You may not know the differences between plan options if you’re new to Spotify. A free plan is available for users on a limited budget. However, the free plan doesn’t provide an ad-free listening experience and has more limited features. Spotify also offers Premium options for music lovers who want more account features.

If you want to avoid ads, prefer to have the ability to listen to songs in any order, and want to download songs to listen offline, a Spotify premium plan may be ideal for you. Compared to other streaming app prices, these plans are affordable.

Here’s a breakdown of Spotify’s premium plan options and their price points:

Spotify now offers audiobooks

Audiobooks can be an excellent alternative if you don’t always have the time or ability to sit down and read a book. You can listen to them while on the go and catch up on the latest books. But buying audiobooks can get expensive, and having to wait months to borrow a popular audiobook from your local library system isn’t always ideal.

But I have some good news: Spotify recently added over 150,000 audiobooks to its collection. As an added benefit, Premium Individual, Premium Duo, and Premium Family users can listen to 15 hours of audiobooks per month at no additional cost.

Audiobooks that are part of the program are marked with a “Included with Premium” note. While writing this piece, I looked at some of the options, and it seems as if many new releases and popular books are available to Premium subscribers, as are older classics.

Unfortunately, this account feature is only available to the primary account manager (the one whose credit card covers the plan cost). That means other users who have joined a Premium Duo or Premium Family plan don’t get access to free audiobook listening. In a recent press release, Spotify said it hopes to expand this offering to other users later.

Considering the affordable price points of these plans, this new feature adds value. If you’re a premium subscriber who likes books, don’t ignore this new feature. If you’ve been considering signing up for a Spotify plan, this new account benefit may entice you to try it. As a new premium subscriber, your first month is free.

Spotify Premium plans offer a more affordable per-user cost

Are you looking for an easy way to save money on streaming expenses? If you’re a Spotify Premium Individual subscriber, you may want to consider switching to a different plan, especially if you live with a roommate, partner, or family member.

Premium Duo and Premium Family plans provide more value because the per-user cost is cheaper. With a multi-user premium plan, multiple people can access unlimited ad-free music streaming at a more affordable price.

You’re wasting money if more than one person in your household pays for individual plans. You can keep more money in your bank account by subscribing to a shared plan and splitting the cost. For additional ways to save money, check out our personal finance resources.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More 

Braving the crowds on Black Friday has advantages you may not have considered before. Keep reading to learn why it might be worth it. 

Black Friday is coming up fast — are you ready? Personally, I’m opting out of shopping in person that day (although I won’t rule out doing a little online shopping). I hate crowds, and I don’t get the day off with pay like many office workers do (I really do love freelance life, but this is one downside).

An awful lot of people will be hitting the stores that day, however. According to data from Finder, about 132 million Americans intend to shop pre-holiday sales this year, and that includes Black Friday shoppers. Americans also expect to spend an average of $708 per person.

We all know the main benefits of Black Friday shopping. Namely, you can save money by taking advantage of deep discounts on electronics, housewares, and more. But what about the lesser-known reasons to bundle up and leave your home the day after Thanksgiving? Let’s take a look at a few reasons to shop Black Friday that you may not have considered.

1. It’s entertaining

If you opt to do your holiday shopping on Black Friday, you’re guaranteed to be entertained. Think about: Big crowds of people fresh off the Thanksgiving holiday, swarming your local mall — the people watching alone is going to be superb. But aside from that, the act of shopping early on the morning of Black Friday can come with an adrenaline rush that you might sorely need after cooking, hanging out with your family, and finally falling into a food coma on the couch on Thanksgiving.

Plus, hitting the stores with your friends or family members on Black Friday gives you the chance to join forces to conquer those sales. It can be a real bonding experience, and a way to enjoy even more time with the special people in your life before you head back to your real life after the Thanksgiving weekend.

2. You get to physically handle your purchases

Online shopping has become so ubiquitous that I bet a lot of us have forgotten the feeling of going to a physical store and searching for the item you want in person. I’m guilty of leaning more on online shopping — I placed over 100 Amazon orders last year, for example. Sure, a lot of those purchases were for household goods like paper towels and cat food, but some of them were gifts for other people. If I’d opted to shop on Black Friday instead, I could have had the experience of walking out of a store with my purchase in hand, rather than impatiently waiting for it to arrive on my porch.

3. You can shop with cash

There are a lot of potential traps you could fall into by shopping on Black Friday, but perhaps the worst one is overspending. It can be easy to get swept up in the moment and buy items just for the sake of getting a deal on them. Fast forward a few weeks, and you’ve got a whopping credit card bill to deal with.

But one perk of shopping on Black Friday that you might want to lean on if you have a history of going overboard is the ability to pay for your purchases with cold, hard cash. If you know you can spend, say, $500 on gifts, withdraw that as cash for your Black Friday trip and once you’re out of money, you’re out. Shopping with credit cards comes with sweet perks like rewards points, but if money is tight and you need a hard limit, leave your cards at home.

4. It offers the chance to support small businesses

Let’s say you don’t much care about scoping those big Black Friday sales at Costco, Walmart, or other big-box retailers. Maybe you just want to capitalize on having the day off work and knock out some of your holiday gift-buying in the process. Shopping on Black Friday gives you the opportunity to visit local small businesses and give them some of the hard-earned cash out of your savings account.

You get the warm and fuzzy feeling of supporting the real people who live and work in your community, and hey — your local clothing shop or independent bookstore might also have some sweet deals on offer for shoppers who come to them that day. (Plus, your local merchants might be far less crowded on Black Friday than they will be on Small Business Saturday!)

Shopping on Black Friday can be an experience. Consider these lesser-discussed benefits of hitting those sales, as they just might enhance your shopping trip.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy.

 Read More