“‘Tis the season to be jolly.” You know what else it’s the season to do? Spend… And a lot more than we’re used to… Over the past several weeks, I’ve been writing to you about how to best prepare for (or navigate through) homeownership. But with December already about to enter its second week, I think this is a good time to talk about the holidays. (Of course, if you want to catch up on my three-part homeownership series, you can do that here, here, and here.)
It’s a Trap This is a great time of year. Everyone’s preparing for family get-togethers, vacations, and New Year’s Day celebrations. But it can also be a stressful, overwhelming, and expensive time of year… Everywhere you turn, there’s some kind of advertisement showcasing a deal or savings. On TVs, grills, cookware, smartphones… you name it. And that means more gift-buying for our loved ones. But if I fail to make anything else clear today, I want to make this very clear: If you can’t afford it, don’t fall into this trap. Generosity is more than buying tangible things for the people you love. There’s so much more to it. And a lot of things that can’t be put in a box are still gifts. So, please don’t stress yourself out trying to spend money on gifts you don’t think you can afford. I just started reading an article by the fast-emerging investing and financial services company Acorns, and it said that 41% of us are willing to go into debt for our holiday shopping. Why??? Do you really think the people you love and the people who love you would want to hear you say you’re going into debt to get them gifts? I don’t think so.
Think Differently If you’re contemplating how much you’ll need to cut back or how much you’ll need to fork out to pay off your credit card(s) because of the damage you’re about to do at the malls and department stores this month… pause for a moment. Maybe you have other options. Maybe you could ask your family if they’d like to try a Secret Santa gift exchange this year. Maybe each person can pick one person to get a gift for. That way, everyone gets something… but without breaking the bank. Maybe you could make something for the people on your list. A pie, a home-cooked meal, a handmade craft. Don’t be afraid to get creative. Or maybe you could talk to your loved ones and just be honest. Tell them you can’t afford to buy gifts this year. If they don’t understand, that’s on them. If you have names on your list that you must get something for… still, pause for a moment. Kids, of course, are typically the ones we really do our best to give them something special. But instead of buying an item at the first place you go to, shop around. Search for it online. I have an extension on my browser called Capital One Shopping. And when I buy something online, right before checkout, it’ll run promo codes automatically to check if I’m getting the best deal. There are plenty other programs like this: Honey, Rakuten, RetailMeNot, etc.
Think Ahead The last thing I’ll say today is, if you’re reading this and you’ve already gone out and done a bunch of shopping—and spending—also pause for a moment. Yes, if you used credit (borrowed money) to shop, you should add it to your debt list and work toward being able to pay it off. You can read more about how to pay off debt little by little right here. But that’s not what I’m getting at right now. Stop and think. Think about the fact that you can do something proactively from this point. Be encouraged by the fact that you can prepare for next year. If you spent more than you wanted to or should have holiday shopping this year, the good news is, you can start fresh next year. And here’s how… First, add up how much you’ve spent (or will spend) on gifts. Second, decide if that’s how much you want to spend come this time next year. Then, write it down and work off of whatever that number is. Finally, do the math. What you’ll do is just divide the number you wrote down by the number of months you have to save. If you know you’d like to start shopping in December, as long as you start in January, that gives you 11 months to save until then. If you know you’ll start shopping in November, then you have 10 months to save. So, if the plan is to spend $1,200 on gifts in December, divide it by 11. That means you should make it your goal to put away $109 every month starting in January. And by the end of November, you’ll have the $1,200 needed to go out and spend. If the plan is to start your shopping in November, divide $1,200 by 10. That’s $120 you’ll save each month. By the end of October, you’ll have $1,200 set aside. If you want to spend half that, and still start your shopping in November, take $600 and divide it by 10. That’d be $60 you’ll set aside each month. This is good practice. You can do this for other expenses throughout the year, too. But since this is the season of buying gifts, you may find it especially useful to try starting in the new year. However, don’t forget about the things that are way more important than the gifts we unwrap… Family, quality time, friendships, kindness, and love. These are all gifts… and a good reminder that the best things in life are free.
With gratitude,
Melody C. Kerr, MS
Writer, Editor, Financial Coach
