By: Marla McAlpine MBA, CCS
The challenge is, many folks spend during the holiday first, then tally up the total later. This often means overspending. I figured out that a little planning goes a long way.
Here’s what I did:
•Use an Excel spreadsheet (makes calculations easier).
•Make a list of people you want to give gifts to for the holidays.
•Remember to add any small gifts you may buy like for office co-workers, team members, teachers, coaches, mail delivery, etc.
•Factor in any other holiday spending including party hosting, activities, Secret Santas, etc.
•Figure out how much you want to spent AS A WHOLE for all of this.
•Break down the per person gift budget.
•Don’t be surprised if you max out the budget before you are done allotting for all gifts! Re-work everything everyone is accounted for with a budget you are comfortable spending.
•Add to that list gifts you want to buy the rest of the year for birthdays, etc. List out all the occasions that will require a gift and set a budget for those.
•Figure out the total for everything. Add 10% as a buffer for new friends and unexpected occasions. That’s your gift savings goal for the year.
•Divide that number in 12. That is the monthly amount you should be moving into a savings account to help fund your year-round gift and holiday fund!
•Use a no-fee savings account that connects to your bank account, and set up automatic transfers once a month or once a paycheque.
•Take it one step further and use cash when purchasing. Cash helps you stay conscious of your spending, unlike debit or credit cards.
While you may not have enough saved between now and your December holidays, this is a great habit to start today. Before long you will have a buffer in your bank account to cover gifts, even surprise ones!
Keep your lists handy and shop sales. If you see the perfect Xmas gift on sale in September, you have the cash to pick it up.
I have been doing this for several years and have not had to suffer the Holiday bill hangover, because I pay for all of my holiday spending with cash from my special savings account.
Still not sure about setting a strict budget for the holidays? You’d be surprised how relieved everyone will be if you set a max budget per gift across the family.
You can even take it a step further and limit to one gift per adult. It took a few years, but I finally convinced my mom to get on board with my ‘no gifts for adults’ holiday policy. We limited the gift-giving to the kids (they were under 10). It was much more fun to focus on them, not to mention less expensive!
In my experience, investing time to make unforgettable memories always supersedes how much money or how many gifts you bought.
Be sure to book time for hot cocoa by the fire with your family, go out skating, take a hike outdoors, and do other low-cost or no-cost activities with loved ones. And be sure to have some ‘chill time’ this holiday season. You will be amazed at how less stress you will be this holiday season.
Marla McAlpine is the owner of Healthy Wallet, and a local Mortgage Broker. She can be reached at firstname.lastname@example.org