How to Keep Your Finances Merry During the Holidays by Monick Halm
by Monick Halm
The holidays are a wonderful time, but they can do some serious damage to our finances if we are not careful! Commercials, print ads and those holiday movies and TV shows can put a lot of pressure on us mamas to make the perfect (in other words, expensive) holiday. Overspending and creating new debt is a common problem and always leads to some post-holiday hangovers.
Here are eight steps you can take to avoid that financial hangover and start the new year feeling financially fit and fabulous!
1. SET A BUDGET. Creating a comprehensive holiday time budget early in the season will be your best defense against overspending and impulse buys. Remember that financial solvency is a gift you give yourself and your family, and it’s worth more than the momentary pleasure of a gift or feeling like you have to keep up with the neighbors. To create your budget, write down everyone you plan to buy a gift for, no matter how small the gift may be. Include ideas of what to give each person, along with the maximum amount you’re willing to spend. Don’t forget to list the people who will receive holiday tips, such as your doorman, babysitter, and mail carrier. When you are creating your budget also add the little extras such as postage for Christmas cards, holiday favors and decorations, or the cost of boarding pets when you’re traveling.
2. DON’T FEEL THE NEED TO BUY EVERYTHING ON YOUR CHILDREN’S WISH LIST. Be clear with your children that you or Santa won’t be granting their every wish. You can’t buy your children’s happiness or love, so why try? If your kids still believe in Santa, help them draft real-world wish lists. In the post-Santa years, set some financial boundaries, and give them some choices.
3. SHOP AT SALES ALL YEAR FOR HOLIDAY GIFTS.Don’t wait until after Thanksgiving to start buying holiday gifts. Keep your eyes open all year round for items friends and family would like. It’s often when you’re not looking for something specific that you stumble across the perfect gift for Mom or your best friend. Once December hits, you’ll be glad that you already have some people crossed off your list. Just make sure to keep all your advance gifts in a designated (and hidden, if necessary) spot so that you don’t forget a purchase you made months in advance, and include these gifts on the budget.
4. GET CREATIVE. Make crafts or baked goods for gifts instead of spending money on store-bought items. Do-it-yourself gifts are great for family, friends and gift exchanges with coworkers. Also, instead of a traditional gift you can offer a service (e.g., baby sitting, walking the dog, or taking an elderly relative out for an outing) or donate to a charity in someone’s name.
5. AGREE TO LIMITS. Amongst friends and family you can agree to budget friendly gift limits. For example, among some of my best friends and our growing families we have agreed that we will not exchange gifts with the adults, but will just give gifts to our children. In my family, we have agreed to a $75 Secret Santa among the adults. Each person makes a wish list of gifts they would like that fall within that $75 price range. Everyone in the Secret Santa pool picks a name and buys for one other person gifts off of their wish list. This is much more manageable than having to buy for everyone and greatly eases everyone’s stress.
6. USE CASH INSTEAD OF CREDIT WHERE POSSIBLE. You might say to yourself that you’ll pay off the credit card after the holidays, but things happen and before you know it, you’re carrying the holiday balance into April. Don’t pay for unnecessary interest and fees on credit cards on items that you’re not even keeping!
7. CONSIDER SPENDING MONEY ON EXPERIENCES INSTEAD OF THINGS Studies have shown that money spent on experiences tends to create much more lasting happiness than money spent on things. Instead of buying lots of things for your family that will soon be forgotten, consider taking the family to see a show or on a vacation. One holiday we rented a cottage in Lake Arrowhead with the entire family and had a very special holiday there. Another holiday season we took the family to Las Vegas and went to see Blue Man Group. In the end, these experiences with you are almost always more meaningful than quickly-forgotten gifts. That’s money well spent!
8.REMEMBER THE REASON FOR THE SEASON. Whether you celebrate Christmas, Hanukkah or Kwanzaa, keeping the holiday’s spiritual message front and center is a good antidote to the holiday “gimmies.” Instead of spending weekends leading up to Christmas in the mall, it would be a lot better gift to spend your time with your family or bring your kids to do something charitable for others.