 Old holiday spending patterns could turn into disaster if you don't have a plan for this season. Now more than ever, it is important to stay within your budget.
For many, the holiday season lasts from Halloween to Mother's Day. From the candy costumes and goblins to Thanksgiving dinner with family and guests, followed by the traditional holiday dinners through New Years, there is ample opportunity to blow up your normal budget and we haven't even mentioned Super Bowl, Valentine's Day, Passover, Easter and all of the family birthdays and occasions that fall in between.
Add to that, the committee meetings, school activities, errands, chores, work and other regular life events and it begins to look like the holidays conspire to create a financial disaster that comes due like a financial Spring Cleaning.
Many financial experts are saying given all of the bad economic news lately, that compulsive, over spending this season could be more dangerous to the health of the individual family budget than any time in the last 70 years. Careless holiday expenditures can take years to pay off which is bad news for consumers who don't merely strain their budgets during the season; they hurl them off a cliff!
It is important that our obligation to our traditions not burden us with expensive credit card debt. It is one thing for young folks to run up debt they know they will have decades to pay off, but if you represent the more mature generation of your family, it makes sense to take a hint from the airline's advice to put your financial mask on first; if you don't, nothing that depends on you will get done if the economy gets worse.
Planning and setting limits can make a big difference in both your financial and your emotional well being. The fact is that most of the money we spend all year is spent during the holidays, so it would make sense to understand how the higher spending creates bulges in the normal budget we have for our mortgage, utilities, car payments and everything else we are responsible for each month.
Each American spends 130% of their paycheck every year to maintain a lifestyle, food, shelter and the basic necessities that make a normal family work. What this really means is that the debt of the last holiday season has yet to be paid when we set out to pile on more debt for the current season. The decision to add to that expensive indebtedness deserves serious consideration in times like these.
Decide how much you are willing to spend in advance and stick to your plan. It is a fact that we spend more money when we are rushed and we are often rushed because we have failed to plan. The essence of every family tradition is being together, each with the other, not overpaying because we waited until the last minute to organize, prepare and purchase.
Say "enough" to everything on the party, dinner or gift list, and then go back and add just the things that really represent the essence and spirit of the event. "No" is a liberating word when you mean it; tactfully used it commands respect. Just say "no". Not "no" for now, or maybe later, or "no" talk me into it, make it "no" don't ask me again.
For many, the richness of the holiday season is in the planning and preparation. Enlist family members to help as a way to socialize and have fun while doing seasonal chores. Get your prep items in advance to avoid running out for items at the last minute which adds mightily to cost and is a needless waste of time.
Don't be afraid to adjust your traditions to suit your current situation. It may be time to pass the bulk of the responsibility of the traditional gatherings to an adult child so that you not have to fend with hordes of people descending upon your home each year. Holidays are a time for sharing and sharing the hospitality burden certainly applies.
Evaluate your approach to shopping and gift giving. Shopping itself is one of the main traditions of the holidays, but it does not have to mean chasing down expensive gifts for every member of the family and all of your friends. Meet friends for Dutch treat lunch and shopping, no gifts, just friends and fun.
Let people know that you feel that being together is more important than exchanging gifts; encourage them to pay down on their credit cards rather than get you something at the mall. Figure out how much you spend buying gifts you feel obligated to buy and pay that amount down on your own credit cards.
Consider making seasonal dinners potluck and invite guests to bring their own traditional family dish; it's a great way to experience friends at a meaningful level because every family has some holiday dish they are famous for and just love to talk about. And make sure those leftovers get parceled out so you don't have a lot of dishes to return the next day.
Do not over look the opportunity to enlist the spouse, the children and the grandchildren in helping you prepare your holiday events. It is a great way to pass on a family recipe or special holiday custom, and a great way to delegate the heavy chores that make holidays seem like work. If the young ones all pitch in at each gathering you can save the deep cleaning for the Spring.
It is common to hear people say that the holiday season is hectic, which is another way of saying stressful. Planning ahead, trimming your budget and being firm about the commitments you are willing to take on by graciously saying "no" can turn hectic into creative and fun. In the process you can focus family gatherings on the value of being together and sharing the togetherness above, far above, the questionable practice of obligatory buying at inflated prices and high interest rates at a time when every individual should be finding ways to spend wisely and save regularly.
And finally, use the fact that you have budgeted and planned in advance to treat yourself to some solitude and as you sit in the tub, realize you could be in the mall parking lot being cut off by someone and smile.
JoAnna Wescott is a financial consultant with Bill Westcott, Inc. She has been instrumental in building a successful financial practice dedicated to serving tenured faculty and senior administration in Higher Education as well as attorneys and physicians. From the beginning it has been her goal to focus on the financial concerns of women. She will be a regular contributor to Connections For Women.
JoAnna I. Westcott
Bill Westcott's Office, Inc.
2030 E Speedway Blvd., Suite #202
Tucson, AZ 85719
520-795-3955 * 800-899-4181 * FAX: 520-795-3782
LPL Financial Member FINRA, SIPC
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