It’s Not Too Early to Think About Holiday Spending

Just because the stores haven’t yet begun their endless looping of Christmas carols on the PA system doesn’t mean you can’t begin planning for your holiday expenses. In fact, now is the perfect time to take a rational, clear-eyed view of your end-of-year spending before you become caught up in all the seasonal merriment. Once it has hold of you, it’s all too easy to shrug your shoulders, rationalize that “it’s only once a year,” and open your wallet far wider than you’d planned to.

Because isn’t that how it usually goes? And then we wake up sometime in January and wonder what happened.

“What happened” was a failure to plan for the inevitable costs associated with the annual rite of celebration.

The solution is to set a budget and make a promise to yourself to stick to it. But “budget” is not a dirty word; it’s simply a tool, like a spreadsheet is a tool, like a blueprint is a tool, like a travel itinerary is a tool. If you can think of it that way instead of as a straightjacket, you’ll feel as if you’re in charge instead of a victim.

Even before you get to the budget, though, you need to make out a gift list. Include family and friends, of course, but also anyone in your life to whom you feel either inclined or obligated to gift during the holidays. This includes co-workers, neighbors, teachers and your children’s coaches, people with whom you associate during volunteer work, and those whom you ordinarily tip: hairdresser, newspaper carrier, doorman, maid, lawn mower, and so on.

Then make a separate list of holiday-related expenditures that you might not think to include in a budget. Will you travel out of the area? How: train, plane, car? Where will you stay and eat while you’re there? Or, if you’re staying in the area, will you be driving to see friends and attend parties? Will they be potluck, requiring you to bring something? Will you have to bring a hostess gift? Will you be throwing parties? Hosting out-of-town guests? Factor in the cost of food and drink.

What about other incidentals that quietly empty your wallet without your even noticing? Greeting cards, gift wrap, decorations, postage and shipping—all necessary but often not included in holiday budgets. If you’ll be attending parties, will you need a new outfit? Do you donate to charities at this time of year?

Once you have this list in hand, you can begin your budget. Start with whatever fixed amount you can afford, and begin to apportion it across your potential expenditure list.

Here’s where you can see that what you want or need to spend so easily exceeds the amount you can afford. If you end up in the red on paper, you’ll need to think carefully about where you can cut back.

If the money won’t stretch as far as you’d like, and you can’t think of any way to make it grow between now and the end of December, you’ll either need to be ruthless in paring your list or be creative in your gift selections.

Can you give fewer or less expensive gifts than you’d planned to? Can you convince family and friends to initiate a Secret Santa exchange, in which members of the group are assigned a single person for whom they purchase a gift? Can you limit the gift-giving to just the children? Can you create meaningful but inexpensive gifts (memory books, special photos, letters of appreciation, redeemable coupons for baby- or pet-sitting, yard work, cleaning, driving, etc.)? Can you convince yourself that the amount you spend on people has nothing to do with either your value as a person or how much you care about them?

However you deal with the issue, you should begin shopping now. Panic shopping leads to overspending. Watch for sales. Use price-tracking websites to get the best deal. If you’ve already bought a gift for your sister and later find The Perfect Gift, return the one you bought earlier, assuming the new one fits your budget.

If you do the planning work now, January will be a whole lot easier to face, and your bank account will be a lot healthier.

And don’t overlook the savings you can get from the financial wizards at Billshark. We can help you put a little more green into your holidays.