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The outlook is bright for holiday spending, and it’s estimated that many households are poised to spend the same or more this holiday season than they did last year. However, instead of joining in on the spending exuberance, perhaps this can be a time for reflection and an opportunity to make the most of the holidays without breaking the bank. If you are starting to feel the financial stress of the holidays, here are some ways to hit the financial reset button during one of the most wonderful times of the year (queue in Andy Williams)!
Acknowledge what has changed:
Before you get started on holiday planning and shopping, reflect on how your financial situation has changed this year and what matters most to you during this holiday season - perhaps it’s additional quality time with those you love or taking a few extra days off. After all, the latest research demonstrates that happiness is highly correlated with having more free time, not more money. Free time is the new wealth status symbol! Have this conversation with your friends and family to set expectations. You might find that they feel the same!
Focus on your priorities:
If your income has changed or you are focused on achieving a specific financial goal like buying a home, increasing emergency savings, or paying off debt, you may want to avoid raiding your savings or swiping your credit card. Instead, look for ways to reduce spending and free up some extra cash that you can reallocate to holiday spending. Consider temporarily canceling a few subscriptions or negotiating down your cable or cell phone package. You can find some additional ideas here. The goal is to set a holiday budget and unlock savings to help cover the costs. Also, don’t forget to cash in your gift cards and credit card rewards as this helps pay for over 50% of my holiday spending each year!
Adjust the scale of your celebrations:
Consider taking turns hosting holiday dinners or parties. For dinners, make it a potluck. If you have foodie friends, here’s an idea. Everyone can make a dish and vote on the best one at the end of the night. Winner gets a delicious bottle of <$20 wine!
Embrace the Secret Santa option. Set a spending budget that everyone can afford and have fun with. Better to spend $50 on one person than $250 on a family of 5!
Make getting a deal simple
A lot of people stress about getting the absolute best deal. Leverage money saving apps or browser extensions that will comparison shop for you and incorporate any available coupons into your purchase. I’ve personally used Honey and have been happy with the results so far.
Most retailers will also price match or beat any price you can find online. Bring your smartphone shopping with you, search for the best price you can find, present that deal to the store clerk, and get that deal on demand. I’ve saved hundreds of dollars and hours of time doing this every year!
De-stress your financial future
Of course, the holidays aren’t the only or even the most stressful times in our lives. An illness, injury, or death in the family can put things in perspective. While it’s not enjoyable to contemplate about these things, it’s better to plan in advance to make them a little less stressful if and when they happen. The holidays can be a good time to discuss your plans with your loved ones around issues like long term care, estate planning, and gifting assets.
As we approach the New Year, you might also want to start thinking about financial goals that you can turn into meaningful financial resolutions. Maybe it’s time to finally start building up your emergency fund, paying off high interest debt, saving for a home, or making sure you’re on track for retirement. Achieving all those goals can put you on a path for a less stressful financial future!
Your presence is your best gift
Keep in mind that money is simply a means to an end. I hope these tips help you simplify and focus on the things that matter most to you this holiday season so that you can give your friends and family the most precious gift of all: your presence! Happy Holidays!
