Happy Holidays!
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In 2008 and 2009, the economy has been terrible. People have been losing their jobs, their homes, and their sense of security. If you are reading this in August or September as I intended (for early planning), the holidays are only a few short months away, and it is even more important than ever that you do some planning around what you are going to spend, why you are going to spend it, and on whom. And financial planning is not only smart in difficult economic times, there are several great reasons to set goals for your finances every year (including around the holidays). Here are some things to consider.
Budget. Set a budget now! Take a look at your overall financial picture. How much do you really have to spend this holiday season? You can get some indication by thinking of what you spent last year or by simply viewing your checkbook and seeing how much is there. Get your financial partners together (this includes spouses or others that you involve in your financial decisions). Ask for their input on overall spending as well as for specific gifts. Come up with a specific amount to be spent and be conservative.
Segregate Your Money. I have heard financial advisers tell people to segregate this money. If your budget for the holidays is $200, for example, take that $200 and separate it from the rest of your money. The safest way to do it would probably be to put it in a separate bank account. However, if you can do so safely, you might also consider getting the cash and stashing it. (Safety includes not having it stolen and not impulsively spending it on something else). The reason for doing this is obvious. Once the account is drained or the cash is spent you are done! Once you have reached your limit you make yourself stop. Set your budget wisely and put the money aside. This strategy clearly leaves out the use of credit cards or going into debt over the holidays. Establish a separate account and get a debit card for it. Again, once the cash is gone, it's gone. Be strict about it.
Be Organized. Next, write out a list of the people for who you want to buy gifts. Be specific! Due to budgetary constraints, you may need to remove some of the people from the list that you had last year. While it is nice to give every one at the office something, you may not be able to afford that generosity this year. Now take a look at that list and the amount of money you have set aside for the holidays and divide it up accordingly. If you have a tendency to spend more money on your children than others on the list, budget for them first. How much is it going to be? Do you spend equal amounts on the children? Do you and your significant other need to have a conversation about limiting gifts or even possibly foregoing gifts between you this year? Don't forget about coworkers, service personnel (hair stylists, mail carriers, newspaper delivery, etc.), and other ancillary people in your life. Also don't forget about charity. In difficult economic times it may be even more important to help those around you that are less fortunate. But if you are going to follow this plan, these expenditures must be in your budget.
Reduce Gift Costs. Many adult families (where the children are grown) set a limit (for example $25 per person) on gifts, or have a round robin gift exchange - or both. In this type of activity, all of the names are put into a hat, and each person draws the name for one family member who they will buy a gift. It has a tendency to make gifts more meaningful (because you are not trying to buy something for everyone), and actually makes the gift exchange more enjoyable as the family can take their time telling stories of how they came up with the idea for the gifts. As you might imagine this takes some pre-planning as well. Having the drawing early and establishing the budgetary rules for the entire family is important. Do it now! (several months before the holidays arrive).
Get Creative. Next, consider thinking outside the box. One of the things you can do to decrease your financial stress is to stay away from the mall (maul). Catalogs, online shopping, and gift cards are all time-saving ideas. They allow you to shop from your living room and have a tendency to decrease impulse buying. Another thing to consider is shopping locally. Give some consideration to the independent business owners in your area. Again - in tough economic times-it is difficult to own an independent business. Yet, they are the backbone to the overall economy. Stay away from the big box stores, and warm your heart by helping your neighbors. Also if you find yourself going shopping for the holidays, do so alone. Having a cranky spouse or child with you which pressures you into buying the first thing you can find (possibly out of budget) is not a smart plan.
Do It Yourself. Another way to cut down on financial burden is by "doing it yourself". Some people think it is kind of corny to make personal gift cards for services or favors. But think about it. Many times parents complain in therapy that they cannot find a good babysitter. How much would it be worth to a couple you know to offer an entire night of babysitting while they go out and get some decompression time? Or maybe you know someone who is the primary caregiver for an elderly parent. The same question stands. Sure, you could buy them a bottle of wine, but how unique is that? What are your talents? Can you cook, fix things, entertain, pet sit, massage their feet, or just do general step-and-fetch-it services? Can you paint a picture, take a photograph, commit to taxi service, or any other creative ideas that will not only save you money but will be received as a unique and valuable gift? Perhaps one of the ways to come up with ideas is for you to stop and think of what you would like to have as a personal gift card. Offer that suggestion to the people around you. If you want to make your own, all you need is a piece of paper and a crayon. If you want to be more professional about it, break out your computer and your printer.
Re-gifting. A not-so-new way to save money is by re-gifting. To some this idea seems unconscionable. But think about it! There's that special trinket that was given to you a year ago sitting in your closet in the original box collecting dust. How wasteful! How cool would it be to gain back that closet space, give the item to someone who might use it, and save money at the same time? One obvious caveat is to try not to give the gift back to the same person who gave it to you unless you can do so tongue-in-cheek. You may want to forgo re-gifting used or soiled items, things that obviously come from another decade, or very personal items.
For the people you have decided not to give gifts to this year, stay green and come clean. What I mean by this is make your own holiday cards explaining your heartfelt greetings to the recipient and well wishes for the New Year. If you wish, go online and find content for a holiday card that is appropriate for your situation. Should you also choose, the "come clean" part is that you tell the recipient that due to financial constraints your family has decided to give cards this year instead of gifts. The people who really matter in your life will understand. Reverse the situation for a second. If a good friend of yours were in this situation, would you be okay with it? Most of the time the answer is yes. Good friends understand financial limitations and don't hold us to superficiality (giving gifts because we "should").
As mentioned in the last Note from the Desk of The Neighborhood Shrink, getting the family (the system) together and committing to financial constraint is important. Telling everyone that this year (and possibly years to follow) is going to be very different is important. Letting them know early helps them prepare. If you decide to abide by budgetary constraints and everyone else goes out and spends big, you may not feel so great about it. Put the message out now. Tell the kids, your spouse, your lover, your friends, and your coworkers that the holidays are going to be different this year.
Finances are important every year. And every year around the holidays I see the effects of stretching them too thin. And in tougher economic times it is even more necessary to plan early. There is an old adage in the financial circles that has proven itself over and over again. People who have real money know how to keep money. Benjamin Franklin said, "Small leaks sink great ships". Patch all of your leaks now. Prepare early. Conserve and preserve your finances for the holidays and avoid lots of stress and anxiety.
NOTE: In November, BeHappy101.com begins its own annual Holiday Happiness series, which will touch on this, and other important “holiday happiness” strategies. Click here for a preview.
Eugene D. “Chip” Weiner
The Neighborhood Shrink
www.neighborhoodshrink.com
Click on the link below to Part Three of the Happy Holidays series (Children)
Click here to return to the full list of Notes From the Desk of The Neighborhood Shrink
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Chip’s practice has a no-nonsense, solution focused approach to counseling therapy and coaching for anyone who needs help. |
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Disclaimer from behappy101.com: The thoughts and opinions expressed by The Neighborhood Shrink (Eugene D. "Chip" Weiner) are not necessarily those of Jimmy DeMesa, M.D., or BeHappy101.com. Jimmy edits these "notes" only for wording and grammar and, therefore, BeHappy101.com is not responsible for the content in these thoughts.
