The holiday spending frenzy has begun. Getting together with family and friends. Gifting. Going further into debt
- Does holiday spending and the idea of more debt stress you out?
- Do you find yourself spending in ways you really don’t want and didn’t plan for?
- Has the joy of celebrating and getting together with friends that you used to enjoy now clouded by the fact that you really can’t afford to do this?
- Are you overwhelmed by your credit card bills once the holiday madness has diminished?
If so, maybe it’s time to start living within your means
Here’s where the common sense comes in. If you don’t have it, don’t spend it. You can start right now to practice better financial management.
As a money coach, I often see a client’s desire of simple joy for the holidays hijacked by obligation and overspending. You’ve likely already explored ways to economize: You draw names, shop early, catch the sales, or buy in bulk.
Take a bigger leap. Go beyond just finding cheaper ways to buy more stuff
While it’s nice to give gifts, but when gift-giving costs us our financial health and our peace of mind, it’s time to redefine how we give those gifts and approach the holidays altogether.
Here’s how to kickstart strategic financial planning
- Seriously evaluate what the holidays mean to you. Ask yourself some hard questions. What if there were no expectations of you for the holidays? Then how would you honestly wish to celebrate the season? Would you still want to buy gifts? If so, for whom, and why? You don’t have to let our consumer culture dictate how you express love and create connection. Think about some alternatives to tangible gifts—giving your time or helping someone with a task.
- Decide how much you can afford to spend, and set a limit. You have to figure out how much money is coming and going for the month so you know how much is available for holiday spending. Once you know how much cash is on hand, you can prioritize your buying. And remember, that’s cash, not credit cards! If money is tight, a commitment of time and thought speaks volumes.
- Respect peoples’ differences, including your own. If your friend wants to throw an extravagant party with expensive gifts, go and have a great time. But you also don’t have to reciprocate. Your idea for a holiday gathering might be hot chocolate, cookies and a hike. Have the courage to be true to your own values and beliefs.
- Create new traditions. Traditions are familiar repeated practices that can give a sense of belonging. But they also might get you stuck in a rut. What about creating some new traditions this year, ones that put common sense above dollars and cents?
One of my colleagues created a new tradition for her family
This is a solution that takes some of the pressure off gifting. They were all getting older and really didn’t need, want or even like the gifts that they were getting for one another. So she suggested that they all take the money they would be spending on each other and donate it to a favorite nonprofit in their names.
Bingo. No more shopping, wrapping, packaging and mailing gifts to a family that was spread out across the US. Doing something to help others is really in the spirit of the holidays, so this was a happy solution for this family.
Why does getting together always mean spending money?
Think about this one. We meet our friends for drinks, for lunch or dinner. Even capitalize on happy hour prices, have a drink and a little nosh, it’s easy to spend upwards of $50. Dinner?
Most people I know are just not going out for dinner the way they used to. There are other ways to enjoy getting together. A walk, a bike ride. Invite someone over for a glass of wine. A little potluck or shared meal. Keep it simple. It’s part of rethinking your relationship with money.
Almost 14 million Americans began this year saddled with debt from the last holiday season
You can decide not to be part of that statistic this year. Remember that you have the power to effect change. Picture waking up in January without more credit card debt.
Remember, if you use common sense along with dollars and cents you will have the gift of financial health all year long. Living within your means removes a lot of stress in your life.
Ask Resa: when should I pay my credit card bill?
As a financial coach, this is one that I always get. Believe it or not, It’s not always the first thing to pay off. Read How Paying Off Your Credit Cards May Not Be the Best Option