How to Manage Holiday Spending and Not Derail Your Financial Plan

by Jason Vitucci, CFP^®

As the holidays approach, it can be a stressful time for those who have a budget to stick to. It is important when shopping for your loved ones that you keep the big picture in mind, not just the holiday ahead.  You want to make sure to stick to your long-term financial goals and not overspend during the festive season.  Here are some tips to help you stick to your budget.

Set Holiday Spending Limits

Use this time of year to create a budget and decide how much money you can afford to spend. Holiday budgeting is a way to set limits on your purchases and still enjoy the season.

The money you can reasonably spend on gifts is money that isn't going to bills. That said, if you want to have a little more to spend, this doesn't have to be just the money left over at the end of the month. You can also use the money that you would normally have budgeted for other items, such as on your morning latte. Just remember to be realistic about what you are willing to sacrifice. You may spend your monthly clothing budget on holiday gifts and then come up empty when you need new winter boots.

Cut Down on Your Christmas List

If your shopping list includes more than a few people outside of your immediate family, think about cutting down on the number of people on your present list. Maybe bake some cookies or other holiday treats to give to all the people you snipped from your original gift list. This will help you spread the holiday cheer without breaking your budget.

Be Realistic About Your Budget and Consider Personalized Gifts

If you don’t have the budget for the extravagant gift that you would like to purchase, consider gifts from the heart. The gift of a framed photo with a treasured memory, those favorite childhood cookies baked for a sibling, maybe hand down a family heirloom to a child or grandchild. Get creative rather than cutting into your retirement saving plan, or withdrawing extra funds from your savings.

Give the Gift of Your Time

Your mom and dad (or other far-away family and friends) might love nothing more than a visit from you. Consider small gifts and large hugs. Think about offering the gift of a night of babysitting for family members with young children, or a home-cooked meal for someone who may appreciate it.

The holidays are a time when it is so easy to break the budget, put thoughts of your financial plan aside. We urge you to think carefully before doing this as it can have long term affects on your financial goals.

As a valued 1st Nor Cal member, we welcome you to contact us for a complimentary financial analysis. All meetings are currently being held by phone or screen share as our office remains closed to in-person meetings for now.

We have webinars posted to our website along with other financial education information, and we welcome you to view them. For more information about our practice, please visit our website www.vitucciintegratedplanning.com.