As the holiday season gears up, you’re likely getting ready to spend time with family and friends, filling the air with holiday cheer. But this exciting time can throw a few curveballs at your finances, which may make it more difficult for you to make your mortgage payment. If you’re currently struggling with making a payment, you should first call your loan servicer, who may be able to help you make arrangements.
But whatever you do, it’s incredibly important that you make your payments during the winter months. And while your mortgage is probably the last thing you want to think about during this jolly time, keeping up with it – even during the holiday season – can help you prevent long-term financial troubles.
Those Unexpected Costs
It may be tempting to focus on the eggnog instead of your finances, but the holiday season is a prime time for those pesky expenses that creep up. Along with your mortgage, make sure you’re taking these extra expenditures into account.
First of all, you’re likely preparing your budget for gifts to give your loved ones. According to a Gallup poll from 2015, adult Americans celebrating Christmas spend an average of $908 each on presents alone. Who knew “dolls that will talk and will go for a walk” could be so expensive?
Whether you’re seeing your uncle for New Year’s or your fiancé for Hanukkah, there’s a good chance you’ll be on the road in the next few months. And the cost of travel adds up. Last year, Americans, in total, logged around 25 billion miles in their cars on their way to visit family, totaling about $52 billion in travelling expenses during the holiday season.
Unfortunate and Unplanned Expenses
During the winter months, there’s a good chance you’ll run into some unexpected bumps in the road, whether that means the furnace goes out, someone gets the flu or your car won’t start in the cold. No one likes to think about these expenses, but in reality, planning for them now will help you give you peace of mind in the long run.
With all the extra costs happening during the holidays, it’s easy to put the recurring expenses on the back burner. This includes your utilities (which may rise during the holiday season), internet bills, cable bills and, perhaps most importantly, your mortgage payments. While you should certainly spend some of your resources on your loved ones this year, make sure you put regular expenses high on your priority list as well.
The Importance of Keeping up with Your Mortgage
It’s easy to get behind on your mortgage payments, especially during the holiday months. But not making these payments will create some problems in the long run. If you don’t make your payment before the grace period (usually the 16th of the month or the first business day thereafter), you’ll be hit with a late penalty. And if it’s not paid for by the end of the month, your credit score will be negatively affected.
While virtually anyone can fall on hard times, it’s a good rule of thumb to make as few late payments as possible. These late fees may not seem like a lot at the time, but once you’re behind, it’s harder to get caught up, as you’ll need to pay your past-due payment and your upcoming payment. This can create a snowball effect (winter pun not intended), where you’re spending months or years trying to get away from late fees and credit damage. It may seem like you can put this expense off for a later date, but if you’re not careful, you could end up paying thousands of dollars in fees alone.
What Should You Do Now?
The holidays can be hard on your checkbook, but with the right preparation, you can make some arrangements to handle the unexpected. Surviving the holidays debt-free will first require some savvy budgeting, and you can start today with a free account at Mint.com. This will allow you to check the pulse of your finances.
Depending on your situation, it may be best to scale back on certain expenses in order to make those regular payments first. If you look closely, you can often find opportunities to save while maintaining the holiday cheer. For instance, if your family needs to cut back on gift shopping, you could commit to the four-gift challenge. Simple steps like this can make a massive difference to your bank account.
To make the most of this season, take some steps to remove the financial stress. Prioritize those recurring payments first so that you can – without worry – devote other resources to your loved ones. And if you still find yourself struggling with mortgage payments this holiday season, start by reaching out to your loan servicer to discuss your options.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.