Holidays are here. That often means we’re about to embark in roughly a month of office parties, family time and unfortunately excessive consumer spending.
Every year, millions of Americans flock retail stores to get their hands on the latest stuff. Most of us convince ourselves that we’re getting good deals and that we should take advantage of the season by buying as much as possible.
But despite all the noise, the same money principles that we try to live by for the first ten months of the year should still apply during the last two. As a matter of fact, it’s easy for all our work and sacrifices to go down the drain if we don’t make sure we stay in control during the holidays.
Here are some tips to help you navigate this holiday period without breaking the bank.
Know where the money’s coming from
Just like your monthly or weekly budget, your holiday spending will only work if you know in advance where the money is gonna come from. This means that before hopping on Amazon or driving to Macy’s, make sure there are clear limits on how much you’re willing to spend.
The past few years, I’ve used a very simple system for gifts. My family lives outside the US so I usually visit them during holidays. Being outside the country and my house means I don’t have to budget for groceries for however long I’ll be away. That’s already about $75-100 that can be used towards gifts.
I also use sinking funds throughout the whole year specifically for gifting and giving. That way, I don’t have to worry about touching my emergency fund or spending money I don’t have when I’m doing my holiday shopping.
These are just a few examples of how to make your holiday shopping work within your budget.
Understand the meaning of holidays
The way I look at it, holidays are an opportunity to show family and friends you love them and also to help those in need if you have the means to. In other words, there is no point trying to impress anyone with gifts that will break the bank.
I’ve given both expensive and affordable gifts before, and the reception is not always a function of the price. I remember the year I graduated college, I brought my mom a framed picture of me hugging her with my cap and gown after commencement. When she saw it, she teared up. I’ve given her $300 gifts before that didn’t cause anything close to that reaction.
Traveling to go back home is a gift in itself
If your family lives far and you have to travel to visit them, that counts as a gift. Mine lives in Haiti, and not only does it cost hundreds of dollars to get there, but I have to take days off from work to do it.
I’m not saying that there’s anything else I would rather do than be with them during holidays. My point is that if getting there is so costly, they should have no problem understanding the reason why gifts aren’t always the most extravagant.
To quote the wise words Kanye West, my presence is a present.
Remember your long-term goals
No matter what, it’s critical to keep in mind that the holidays represent a tiny portion of the year. As a result, make sure it’s treated as such. If Christmas gifts significantly slow down your debt repayment process or keeps you from meeting investment goals, something is wrong.
I understand it’s easier to just try and please everybody, but at some point you need to make sure your own situation is okay and taken care of. People that really love you wouldn’t want you to get in trouble with the bank over missed payments at the price of them having a cool new gadget.