How to Survive the Holidays, Financially

November 26, 2017 Greg Caramanica

Holiday Spending - Survive the Holidays

The end of year holidays are a joyous time that provide happiness to a great number of people. It is a time when we think of others and a time when the emphasis is on giving.

How do you survive the holidays, financially?

You might not like it, but the best way to control your spending is to create a plan and stick to it. This can be difficult for some, especially in the midst of the holiday season when the air is filled with excitement and the marketing machine of tv, radio, and print advertising perpetually encourage you to spend more.  The idea of constraining your spending during the holidays can stir up many emotions, leaving you with mixed feelings.

Even though planning your holiday spending can be uncomfortable, we can all agree that our loved ones and friends would certainly not want us to go into debt. If they found out that we spent months recovering our bank accounts after the holidays, I’m sure they would rather have something smaller or less expensive instead.  Could you imagine the guilt they would have if they found out they were the cause of your financial distress?

The balance of affordability and generosity is important. The holidays are certainly a time to give and feel good about bringing happiness to others. A proper financial plan can give you a feeling of freedom, knowing that you are spending in a responsible way and purposefully carving out time and resources for others without getting yourself into debt.  It’s the no-guilt holiday approach. Doesn’t that sound amazing?

When should you create your plan? Well, the best time is in the beginning of the year, in January to April.  This is the time when all your final numbers should be available about your prior year’s earnings, taxes, and spending when the buzz of the Holidays is no longer a factor.  Creating a plan outside of the holiday season will reduce the negative emotions.  Then, next year, you can look back on that plan and take your own advice, from a less emotional you, about how much to spend.

So, what can I do now?

Well, you can certainly take the time to prepare a rigorous plan during the holidays, but it’s better to wait.  In the meantime, create a preliminary plan just focusing on holiday spending.  You can do this by quickly looking back at last year’s spending and vowing to spend less.  This is especially important for those of us who spent months paying off credit cards or dipped into savings a little too much, sacrificing other financial goals we had been saving for.

If you review last year’s spending and didn’t feel like you needed to cut back, then congratulations, you are one of the few that fit into this category. Just make sure you are being honest with yourself!

In summary, a sound approach for surviving the holidays, financially is:

  1. Take a quick look at last year’s spending and vow to spend less this year.
  2. Create a quick budget from these numbers, understanding how much you can spend on each person.
  3. Shop online if you can, so that you aren’t subjected to the messaging and spending environment as much as you would be if you went to the stores.
  4. Stick to your plan when buying gifts this year!

Then, in the first quarter of next year:

  1. Take stock of your earnings and spending for the previous year.
  2. Build a robust financial plan where you are honest with yourself about your financial goals and how you plan to accomplish them, taking everything into account and prioritizing. As part of this, create a budget for the year, including next year’s holiday spending with a clear mind, free of the holiday “buzz”
  3. And then, stick to your plan!

Happy Holidays everyone! Be safe!