One of the most stressful parts of the holiday season is the spending. Whether for gifts, parties, food or beverages, the costs add up.
In a previous blog, I talked about my love of lists. I make lists for everything — the holiday season included. If you want to rein in your spending and stay in control of your wallet, I suggest you create several lists.
Make your Gift list
Start with gifts. Identify who is receiving a gift and the dollar value you will budget for each. I would suggest a spreadsheet. Column A the name of the person, column B, the description of the gift, and column C the budgeted amount. In column D, enter the amount of the actual spend. Using the spreadsheet will allow you to total the budgeted and actual spend column. This allows you to keep and eye on the totals ensuring you are sticking to the budget you prepared. There are templates you can use to help you plan, like this one at Spreadsheet 123.
And your Expenses list
Your second list, which would be incorporated into the 2nd page tab of the spreadsheet, is for the other expenses outside of gifts. This includes items like gift wrap and cards, decorations, food and beverages. These expenses can have a dramatic impact on the overall budget for the season. Like the list for gifts, attach a value to each item on the list, totaling at the bottom for the entire spend.
Spend what you have, not what you don’t
In a perfect world we would have been saving a little from each pay cheque over the past year. If this has not happened, you need to be extra cautious with spending. It is easy to pull out the credit card and charge the items. This is one way to finance the purchases but leaves you picking up the pieces in throughout the new year. To avoid the credit card bills after the holidays, reduce your spending on gifts and the list of other items. Relook at how much you had planned to spend and start tweaking the numbers to get the overall expenses down to what is manageable. Look at your regular monthly expenditures, are there items that are “nice to haves” that could be avoided for the month to divert those funds to the holiday spend? I love my Starbucks Decaf Americano, but maybe for the next several weeks I could make my coffee at home in a travel mug and pack a lunch instead of a yummy wrap from The Chopped Leaf!
Think outside the Gift box
2020 has been a whirlwind for most people. Maybe this is the year to speak to family and friends about a gift exchange instead of buying for everyone. Set a limit on how much is to be spent. The drawing of names in the year of no gatherings can be tricky. We found a great website that will email each person in the group and send a randomly selected secret Santa – check out www.elfster.com. Add in the time for the virtual party and wait for the name to appear in your inbox. Send out the package well in advance of the event and there is your virtual gift exchange.
Make a little Extra
Another option to finance the spend at this time of year is to look for a seasonal position outside of your regular job. This additional funding can subsidize what you spend for the holidays. Remember, if this additional position is an employed role, the employer must take the correct amount of income tax. Advise them you have a full-time position and that you have used your personal exemption. If the position is contract and no income tax is being withheld, make sure to set aside 15% – 20% in a savings account to pay the income tax owing in the spring. Remember for every dollar you earn extra, about 15 to 20 cents needs to be saved for income tax. The eighty cents is yours to keep.
Plan, and be Merry
The holidays can be stressful enough without the added pressure of financing gifts and extras. This year plan what you are going to spend. Understand the total you are committing to. Have a plan to pay for it. Stick to the plan. You will feel much happier in the new year when the credit statement is manageable. Then start your plan for 2021.
The best part of the holidays is spending it with loved ones, be it in person or online. I personally believe in giving the gift of time. It is precious and appreciated by everyone.
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