Smart holiday spending: Tips from a financial trainer
The winter holidays bring moments of joy, but they also tempt us to make impulsive shopping purchases, especially when bills tend to be higher during this cold season. Financial trainer Victoria Iordachi shares insights on how to manage your income effectively, save efficiently, and avoid falling into debt, even with modest earnings.
Victoria Iordachi recommends following the 50-30-20 rule for effective money management. According to her, "20% of your income should automatically go to savings because it's essential to think about our future. Then, 50% should go towards our needs, and 30% can be allocated for our desires." This principle is regarded as a "golden rule."
Iordachi emphasizes the importance of tracking expenses. She states, "First and foremost, automatically set aside 10-20% for savings—there’s no discussion about this. If you haven't started yet, begin today by recording all your daily expenses. You’ll discover the real magic of identifying toxic spending. By recognizing where your money goes, you’ll be able to save more in the coming days."
Even individuals with modest incomes can find ways to save. Iordachi explains, "We often complain that we don't have enough to set aside, yet we somehow manage to spend on daily coffees and other small expenses that we don’t even realize add up."
To curtail impulsive purchases, the expert suggests a simple postponement strategy. She advises, "This approach is not about being stingy; rather, it's a way of thinking that is balanced and prudent. It involves prioritizing your purchases and planning ahead. For instance, if you find something online that you really want, add it to your shopping cart and give yourself a day to reconsider. If you still feel you need it after that time, then go ahead and make the purchase."
When it comes to avoiding risky loans, Victoria Iordachi warns against relying on consumer credit. She states, "In financial education, relying on consumer credit is a misguided approach because it often leads to impulsive spending, which should ideally come from planned funds. Living in debt creates financial chaos and indicates a low level of financial awareness."
Ultimately, financial discipline—through planning, tracking expenses, thoughtful shopping, and avoiding risky loans—is key to keeping the holiday season balanced and free of financial stress.
You can listen to the full discussion on this topic on the "Zi de Zi" show on Radio Moldova.
Author: Veronica Scorpan
