Minding your spending can lead to a stress-free time full of gathering, joy and, yes, a bit of indulgence.
The holidays are quickly approaching. For some, that strikes a sense of nostalgia and excitement. For others, it ushers in a period of dread and worry: worry about the expense of the season and dread the credit card bills coming in January. The holidays can be a time of financial peace of mind—if you go in with the right mindset, a great plan and a commitment to stick to your budget. Adhering to a spending plan can be liberating. It gives you permission to create the holiday you and your family want. Moreover, think about how amazing it's going to feel in the new year when you receive your credit card bill and the balance is $0!
These five steps will help.
1. Decide how you want to feel after the holidays. Relaxed? Energized? Do you have more big expenditures planned or will you be more low key? You need to determine this before you can make a plan, otherwise it can get hijacked.
2. Create a budget. This doesn't need to be complicated; meet with your family, decide what the season will entail and determine how much it will cost. Then, divide that amount by the number of paydays between now and the holidays—that'll tell you how much money to put aside every paycheque. For instance, if you and your family decide that you have $500 to spend, and there will be four paydays beforehand, then you need to put away $125 from each cheque. And when it comes time to buy things, leave the credit cards in your wallet and use cash. You may not receive the reward points, but you'll enjoy the peacefulness of a credit-free holiday.
3. Know what can derail your plan and devise ways to mitigate the obstacles that invariably arise, whether it's navigating additional work parties, unexpected guests or family members who change course midstream. Depending on how you want to deal with these monkey wrenches, you could factor extra money into your budget for unplanned expenses or you could set boundaries and gently tell people you've committed to a budget from which you won't stray (and decide what you're going to say in advance so you don't get caught off guard).
4. Make a comprehensive list of things that'll cost money, such as gifts, decorations, parties, clothing, shoes, food and beverages. When it comes to presents, for example, make a list of who you'll buy for; once you've made your purchase, cross that name off the list. Once a name is crossed off, that's it. We can be our budget's worst enemy with spontaneous last-minute purchases.
5. Check in regularly with your family. Are you on track with your spending? Is everyone else sticking to the plan for their purchases? Stay on top of your limits and make strategic adjustments where necessary.
Stacy Yanchuk Oleksy is the director of education and community awareness at the Credit Counselling Society. Visit mymoneycoach.ca for more information.