Don’t let the ghosts of Christmas Past haunt you forever
The holiday whirlwind has come to an end. Now it’s time to get organized and take stock of the damage that was done.
The holiday season is notorious for causing people to overspend and rack up dangerous amounts of debt that will cause cash flow problems into the New Year and beyond. Are you finding yourself stuck in that rut again this year?
Don’t sweat it; just start making some proactive moves now. While it’s fresh in your mind, make a plan to set yourself up for success next Christmas. In the words of Dave Ramsay, “Christmas is not an emergency, it happens on the same day every year.”
Make it automatic
I suggest setting up a separate savings account just for holiday spending. That way, you’re putting money in it all year long and there’s a bucket of cash sitting there by the time you need it in December.
If you set it up at an online bank like Ally or Marcus, you’ll earn much more interest than you would at your regular brick-and-mortar bank. Plus it will be “out of sight, out of mind” since it is not in the accounts you use daily.
Estimate what you’ll need to spend for the season, divide that by 12, and have that amount direct deposited from your paycheck to this account each month.
Here are some things to plan for:
1. Gift giving
Make a list of everyone you bought a gift for this holiday. Don’t forget all the teachers, dog walkers, daycare providers, neighbors, doctors, hair stylists, cleaners, mail delivery folks, etc., that you tend to buy little gifts for at the last minute.
Once you have made this list, hold onto it for future years and just adjust as needed.
2. Holiday cards
Holiday cards have a sneaky way of draining your pocketbook. Printing cute cards is easy through online sites, but beware: $2 per card sounds cheap, but it can add up fast. If you order 50 cards, you’re talking $100 plus the cost of postage.
If you’re trying to save money in this area, consider emailing your holiday message or order actual picture prints for 10 cents a pop instead of $2 for the same photo printed on a card. I personally LOVE receiving and giving photo holiday cards and usually leave them on my fridge all year long.
If printed photo cards are an important part of your holiday traditions, simply incorporate the cost into your budget each year so it doesn’t sneak up on you.
3. Black Friday Shopping
You are a sucker for a good sale and Black Friday prices are hard to resist.
What did you buy this round? Clothes for the family? A new party dress complete with shoes and a new bag? Some upgraded electronics or appliances? You know you’re going to spend money when these sales come up, so why not plan ahead?
Take stock of what you bought this round and ballpark some funds for this coming Black Friday so you can take advantage of these deals without the guilt and the credit card bill.
4. Charitable giving
Christmas is a time of giving and celebration that makes us want to open our hearts (and pocketbooks) to the organizations we care about or those in need. Giving around the holidays or any time of year is a wonderful and worthy expense.
Just make sure you budget for it and have the funds set aside, so you’re not caught off guard.
Don’t let financial woes ruin your year. Plan ahead for expenses like gifts, holiday cards and shopping so that you are not frazzled by last-minute shopping or stressed out by the aftermath of a large credit card bill.
The holidays are a time for fun and celebration. Let’s keep it that way.
Jamie Bosse is a Certified Financial Planner professional and a member of the Financial Planning Association of Greater Kansas City. She is a Financial Planner at Aspyre Wealth Partners and the Author of the children’s book, “Milton the Money Savvy Pup: Brings Home the Bacon.”
This story was originally published February 4, 2020 at 12:00 AM.