Holidays Ruin Your Budget, Christine Luken, Financial Lifeguard

Don’t Let the Holidays Ruin Your Budget (Podcast)

Holidays Ruin Your Budget, Christine Luken, Financial Lifeguard

Today’s episode is “Don’t Let the Holidays Ruin Your Budget!” Thanksgiving and Christmas are right around the corner…. With extra expenses for entertaining, decorating, and gift giving, sometimes the holidays aren’t so happy for our budgets!

In this episode, I’ll give you tips for setting your holiday gift giving budget, and talk about ways to minimize your holiday decorating and entertaining expenses. You’ll be able to spend wisely so both you and your wallet are fat and happy during the holiday season!

• The first and most important thing you can do to prevent a case of Credit Card Hangover in the New Year is to put together a holiday budget. This budget should include gift giving, decorating, and entertaining. If you’ve never done this, I suggest going online and pulling your credit card and bank statements from November and December of last year to get a starting point.

• In putting together your holiday budget, you may realize that there’s not enough go around. How do you handle this dilemma? I think that it’s best to decide as a family, what are the most important things and experiences you want to have this year, and focus your dollars there. Sometimes we mindlessly spend money on certain things every year out “holiday tradition” but they’re really not very meaningful for us. For example, let’s say that every year your family of four goes to see a live production of The Nutcracker every December. Is it something that the whole family LOVES to do? Or is your son fidgeting and whining during the show, while your husband snoozes with his head on your shoulder? If so, maybe it’s something that just you and your daughter continue to do together and you let the guys stay home and watch football. Everyone’s happy AND you just trimmed some money off of your holiday budget!

• I think the easiest area to save money is holiday decorating. The first Christmas that my husband and I were in our current home, we did spend some money on holiday décor. We focused our money on reusable items like silk flowers, an artificial Christmas tree, and a wreath for the door. Our original motivation for purchasing an artificial tree, wreath, and other silk floral items were our cats. We knew that Peanut and Little Tiny would be drawn to real plants and get into them. However, I now realize how much money this saves us year after year by reusing these great looking decorations. Yes, I usually buy a few new things every holiday season, but I’m more selective about what I buy because I don’t need much. The Dollar Stores usually have some great seasonal items, like decorative towels, gift wrap and bows, potholders, and kitchen ware. I bought a $3 snowman platter for my famous Christmas sugar cookies and I’ve had it almost 10 years. No one would know that I bought it at The Dollar General unless I told them.

• Holiday entertaining is one category that can definitely get out of hand quickly. The main rule to keep in mind is to always keep it simple. Don’t go overboard on the number of items on the menu. Have friends and family members bring a signature dish so you’re not buying all the food. I’ve found that people love showing off their culinary skills and most don’t mind contributing to the meal. So when someone says, “What can bring to dinner?” Don’t say, “Nothing!” Rather than stocking a full bar of cocktails, wine and beer, make a signature drink or spiked punch bowl instead. If someone doesn’t care for what you’ve got, they can easily bring a bottle of their favorite wine. If you need extra dishes, glassware, or specialty items such as a turkey platter, see if you can borrow from friends or family instead of buying them.

• Gift Giving is usually the most emotionally charged area of holiday spending. Make a list of all the people for whom you typically purchase gifts. Is there a way for you to whittle down your list? We did this on my Dad’s side of the family a few years ago and it’s worked out great. My stepmom suggested a gift exchange instead of buying something for all of the adults. Now, instead of having to buy six gifts, my husband and I only have to buy two. We also put a price limit of $25 or less and pick a theme. This year it’s “As Seen on TV” which is going to be super fun! We do the exchange as a “white elephant” which makes it fun to “steal” the gifts we want from each other.

• Don’t forget that a gift doesn’t have to be expensive to be meaningful. Parents and grandparents especially like personalized and homemade gifts. I’ve made calendars for parents on both sides of the family with pictures of everyone though out the year and included everyone’s birthdays. Those were always a hit. Be sure to get started early on personalized gifts so you’re not stuck paying for expedited shipping to make sure it arrives before Christmas. (Homemade baked goods as bulk presents: cinnamon sugar pecans, cookies)

• The holiday season is supposed to be a fun and relaxing time with friends and family. However, overspending on the holidays causes major stress once the bills come rolling in after all of the fun is over. We can also experience emotions, such as guilt, during this time that can negatively impact our financial health. For example: If you are recently divorced, you may try to make up for not spending as much time with your kids by buying them a pile of presents. Trust me, kids want your time and attention more than your gifts. Take some time to think about what emotional triggers usually cause you to spend more than what you can afford. Sometimes other people will try to put pressure on us to spend more than we’d planned. The best way to handle this is to say: “We’re making a concentrated effort to become financially healthy, so we’ve put some reasonable limits on our holiday spending. This is our budget, and we’re going to stick to it.” Just by being aware of these issues before they come up will allow you to choose your response instead of reacting out of old habits. This way you are spending your holiday dollars wisely – on the things that are really important to you and your family – plus you won’t be suffering from a credit card hangover come January!

Thank you for listening to this episode of Financial Lifeguard on Duty. As always, I am available for coaching sessions both in-person and video conferencing. Don’t wait until AFTER the holidays to get financially healthy!

Looking for a reasonably-priced holiday gift? My book, Money is Emotional: Prevent Your Heart from Hijacking Your Wallet makes for a perfect present!