The holidays at year-end present several out-of-the-ordinary challenges in the financial area. The question is not limited to the important issue of how much to spend on which gifts for various recipients; there is also the opportunity to spend extra on travel, dining out, entertaining, decorating, gift wrap, and special attire with accessories……just to name a few. Couple these challenges with the hectic pace, elevated emotions, and easy credit and we can find ourselves over using those “plastic passports to poverty”………. credit cards. The impulse can be strong and the damage long lasting.
The answer to this issue during the holiday season is not different from the answer that leads to success in managing our money the rest of the year. A little planning and tracking goes a long way. We know the holidays are coming and when they will arrive. We can also remember last year and years before that, so resolving to address these challenges rationally does not require the application of astrophysics level mental gymnastics. Build a little reserve for these needs (ok, too late this year….but just right to decide to begin in January for next year). And don’t think of this process as “budgeting”, which has a scarcity, denial flavor to it. Words are important to the way we view things, especially the words we use in our thoguhts. Think of this process as managing your holiday spending plan.
It has been said of Americans that we spend money we don’t have, to buy things we don’t need, to impress people we don’t like. Any part of that is negative, but taken together the idea is particularly troublesome. Does it apply with special power in the holidays? To some degree yes, for most of us. Gift giving should be about high regard, thoughtfulness, generosity, and relationship. The gifts that mean the most are the ones that show the most thoughtfulness, not the ones that are the most expensive, per se. A great expedient to this process of selecting the right gift is to pay attention and then to keep good records. Put your gifts, incoming and outgoing, on a spreadsheet by year and keep track. Throughout the year pay attention to the likes and dislikes of your friends and relatives. As the ideas come, keep notes on the spreadsheet. This will greatly simplify the process and improve its outcome, especially when combined with online shopping or combining purchases with other errands, spreading the expense over time and increasing the chance to buy on sale.
Better yet, gifts that we generate from a skill, know-how or uncommon resource can be especially meaningful to recipients close to us. Do you cook, write, make jewelry, hand tie fishing lures, have a collection that you could reduce, have a skill that you can coach, have access to a vacation property or possess musical talent, for example? We all have knowledge, abilities, and things that others would value. The spreadsheet idea helps deploy that thinking improving the value and effect of the gift and reducing the cost.
As the holidays unfold it is important to keep track of spending, especially credit spending so we know what is going to happen when the bills show up in January. Keep a log in a central place. Such ongoing positional awareness will help with the decision making in the heat of the holiday spending battle.
Notice the suggestion that keeping records in various ways is a common theme. You might say it is too late to do much planning this year? Maybe so, but it is not too late to capture this year’s experience setting the place to improve the future in this important area.
