I know, I know. Labor Day is still on the tips of our tongues and you haven’t even thought about the kids Halloween costume yet. It may feel too early, but unless you’re expecting some type of financial windfall between now and December, it’s definitely time to start Christmas planning! With just over 100 days until Christmas, it’s time to start your preparation for the holiday season. The reality is that when you’re not prepared, you make what could be and should be an amazing time of year far too stressful.
Far too many of us become overwhelmed by trivial things; From the decorations most people won’t even pay attention to, to what to buy co-workers we barely like, we spend money we don’t truly have because of both commercial and self-induced pressures. Getting into the holiday spirit doesn’t have to break the bank. You can do it by simply asking yourself these questions to ensure you are stress-free and financially ready for this holiday season.
1. What did I spend last year? The best indication of what your holiday spending may be this year is determined by what you spent last year. Check last year’s bank statements or gather every last receipt for each purchase you made or expense you incurred during the holiday season (November 20th – December 31st). Include everything from gifts to additional food, wrapping paper and decorations. Tally it up and add at least $100 for all the small things we know you’re going to forget. This number represents what you need to save over the next few months.
2. Where will my holiday money come from? Based on your findings, create a holiday fund. Divide the total dollar amount of what you need to save by the number of paychecks you plan on receiving between now and Christmas. Begin stashing money away in a separate account as soon as you possibly can. If you don't trust yourself, utilize online banks like ING Direct. They typically takes 48 hours to transfer funds, so that should help you think twice before spending your holiday fund on anything not holiday related.
3. What’s in my spending plan? Categorize every holiday-related expense imaginable. Write down how much you anticipate spending on each. Add everything up. If it exceeds the budget, prioritize and adjust your list accordingly. Remember everything is negotiable. Don’t feel pressured to go beyond your means.
Related Post: 7 Ways to Spend Less and Erase Holiday Stress
4. How much can I really afford to spend? Understanding what you spent last year is just a starting point. If your finances have changed since then, don’t strain yourself to meet or exceed past standards. The goal is to pay cash and avoid any additional debt in the New Year. Remember that with so many people facing financial challenges let yourself and others off the hook. Splurge on beautiful holiday cards or take a nice family snapshot and turn it into a festive postcard to share with co-workers, distant family and friends. And for those closest to you, if there is an opportunity to utilize layaway for the kid's toys or for your significant other's jewelry, then go for it! They won't appreciate the gift any less because you didn't go into debt over it.
5. Will holiday spending force me to neglect December obligations? The holiday crunch causes many consumers to sacrifice payments on their normal obligations which really does nothing but make an already challenging situation worse. Racking up late fees and other penalties is no way to start the New Year. Focus on impressing your creditors; not impressing kids. After all, we all know that no matter how much our children beg for this or that and may genuinely be excited on Christmas day, most won’t be interested in the gift past January 31st. . . . if we’re lucky. Unfortunately this means you could be paying for the gift far past then if you don’t take the time to plan properly.
So, take the stress out of this holiday season and start preparing NOW. December will be here before you know it and you don’t want to get caught by surprise again this year.
Until Next Time,
Seek Wisdom, Find Wealth & Be Blessed