By Jake A. Castillo CFP®, AIF®, Associate Wealth Advisor
The end-of-year holidays can be a stressful time of the year for individuals and families. It’s well known that people often report experiencing anxiety and stress over the holidays, and for many, one big culprit is overspending on gifts and celebrations.
Whether it’s buying gifts for your loved ones or shelling out for expensive meals and entertainment, planning ahead and budgeting can help you avoid going into debt or putting yourself in a stressful financial position. Read on for some suggestions on how to get started.
Integrate Your Spending With Your Annual Budget
When planning for the holidays, the most important factors and practices are knowing your cash flow and setting a budget. This is useful in both budgeting for Christmas as well as creating a Thanksgiving budget if you’re hosting a big gathering.
You should have a clear picture of your month-to-month financial obligations and necessary expenses – not just for the holiday season but for the entire year. A good way to start is by tracking your expenses. This is easily done with a budgeting app or an excel spreadsheet. List out what you’re spending each month and do an audit of your expenses. You’ll quickly find that there are certain things that you can likely cut back on or eliminate.
Save Ahead for Your Holiday Budget
Once you establish your monthly expenses, you can start using any leftover cash flow to allocate to a savings fund for the holidays. To help establish a sufficient holiday fund, consider starting early. If you’re budgeting for Christmas and saving throughout the year, you can help reduce the feeling of any negative financial impacts during the holiday season.
Plan Ahead for Gift Giving
Another important step is establishing who you want to purchase gifts for. Make a list of recipients and how much you plan to spend. Many people find it a temptation to splurge when buying gifts for others; it’s all too easy to blow out your holiday budget when shopping for close friends and family.
To avoid overspending, stick to the plan and the budget you’ve established. Also, why not start shopping earlier in the year? Identify different sales throughout the year – Black Friday, for example, is known for great deals – and consider shopping around to help find the best prices.
One alternative option to buying gifts is to create your own. Giving a gift that reflects your thoughtfulness and investment of time can be more meaningful than buying something from a store or website. Getting creative and taking the time to make DIY gifts can help keep you aligned with your budget.
A Stress-less Holiday Season
Taking the time to prepare for the holiday season can alleviate some emotional and financial stress. Imagine a holiday season with fewer worries and giving a gift that your loved ones will cherish. Either it’s a DIY homemade gift or one you’ve saved up and purchased. Overall, planning ahead, knowing your expenses, and staying with the budget you’ve established is key to not overspending – freeing you up to hopefully avoid financial stress and truly enjoy this time of year.
Disclosure:
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant.
