The Holiday season is my favorite time of the year, bar none. It’s when the air is cooler, lights brighten up the city, and I get a lot of downtime to bond with my friends and family. And all the sales!
Like most, though, I do have a love-hate relationship with the season. There’s all those warm and fuzzy stuff, yes, but there’s also more traffic, more crazy planning, the rush to “close shop” at work, and the seemingly unfixable task of making the so-called “budget” fit for all the people on my gift list.
Have you been seeing those “anti-stress” Holiday tips around? I’ve got my own handful! But I’ve updated the suggestions to make them really work (at least they have in my case, hope they do for you, too!)
1. Choose your ‘Top 30’ for 2015
Contrary to popular practice, the holidays should not be an excuse to neglect your budget. 20% of your income – bonuses, 13th month included – should still go to savings. So you have more to spend and still more to save. Choose simple but meaningful gifts.
Just setting a particular amount for all your gifts might not work. Be as specific as possible. Set a budget for every circle (family, work, friends), and if necessary, identify a definite number of people you absolutely need to gift this year – for example, 30. Remember that gift-giving is an act of goodwill and generosity and not a requirement during the holidays.
2. Your emergency fund should remain intact
It’s the last stretch, and you’ve been good and thrifty all year! Even if the crazy sales are compelling you to overspend juuust a little bit, Avoid dipping into your emergency fund now, even if January (and a new year of savings) seems like just mere weeks away. Remember that heart attack instances are higher during the holidays. Keeping your emergency and insurance funds intact is one way of keeping your peace of mind during the stressful, hectic season.
3. For gadgets and trips: stick to what you’ve saved up
Resist the urge to overspend beyond the budget you’ve allocated. Your windfall during the holidays should go towards future expenses and goals already – i.e. preps for the year ahead, major renovations, or big purchases you’ve already planned for. If you get a little extra from bonuses and delayed payments (hello freelancers!), avoid blowing them now on things that you’ve already set a specific budget for. Instead, save them for the future!
4. Let your kids choose their gifts
For parents with kids who are tweens and older: the holidays are also a good opportunity to teach your kids about the value of investing their money. This year, tell them that you have a challenge for them: for example, say you will give them P1000 (~$25) and they can buy anything they want with it. But tell them that if they don’t spend the whole amount, you will put whatever is left in the budget in the bank, and match it so that it doubles. You will keep adding money is theirs forever, as long as they don’t spend it. This will teach kids the value of saving and investing early on. Don’t be surprised if they say that they’ll opt to save the entire amount in their bank account.
5. Don’t forget yourself
Brands and shops will be enticing you well into December with “get now, pay next year” and zero-interest schemes. It’s really tempting! And after spending a huge chunk of your time, effort, and budget for others, it really seems logical to reward yourself materially.
But hold that thought! Instead of spending for yet another phone or new laptop, how about parking that budget first and giving yourself the gift of a new business, or a new piece of real estate? If you don’t have enough funds now, you can open a mutual fund account that can grow your money over time. This gift won’t need to be replaced or upgraded every year – in fact, it will give YOU something in return every year.
These are things that you probably already know, but it doesn’t hurt to be reminded of them once in a while. Spread the holiday cheer: make smart money choices even during the holidays!
NOTE: This is a piece that I originally wrote for a client, but it never saw the light of day. The angle was revised even before I could show the piece.