At the end of the year, there’s a trend that happens for many people: a much more relaxed approach to spending and budgeting.
For a lot of people, by the time the holidays roll around, they’ve already fallen off track with their finances. So instead of pulling back, they start overspending on gifts, travel and other holiday expenses, with the idea that they’ll fix things in the new year.
It’s also particularly important for Americans to be mindful this year, as household debt hit a record $1 trillion. After years of high inflation, the majority of households are feeling that financial strain, and struggling to manage it.
While you don’t have to swear off any holiday shopping or festivities, you can also take a more mindful approach to end-of-the-year spending, so you’re in a better place when the new year comes.
Have a Game Plan for the Holiday Season
Nothing ruins the holiday spirit like a painful credit card bill in the new year (especially with the current high rates.) If you want to enjoy the season without the guilt, go into it with a plan that you and your family can stick to.
Make a list ahead of time of who you’re shopping for and how much you plan to spend on gifts, hosting and travel expenses. That way, when it’s time to make a purchase, you don’t have to feel worried about whether or not you’re overdoing things.
When you’re making a plan, be really honest with yourself about how your year has been, and what you can comfortably afford to spend. Do not feel pressured to do something that you can’t afford or simply don’t want to, whether that’s gifts for every member of your extended family, or tickets to The Nutcracker.
It’s not worth going into debt or spending more than you’re comfortable with because you’re trying to keep up with others’ expectations.
Be Mindful of Seasonal Deals
Between Black Friday, Cyber Monday and all the other deal days to come, it can be very tempting to overbuy to save a buck. However, if you approach sales with a strategy, you can save yourself money – without blowing your budget.
Just like going to the grocery store without a list might lead to buying extra snacks, soda and other junk food, going into a deal day without a plan can result in impulse purchases that you wouldn’t buy otherwise.
Instead, make a list ahead of time of the gifts you plan to buy, or even bigger ticket items that you’ve been planning to buy, but wanted to wait for a good deal. Generally, electronics like tablets, computers, laptops and TVs, and some small home appliances, are some of the best deals on Black Friday and Cyber Monday.
Also, don’t feel tempted to buy something immediately because it goes on sale. Stores tend to host deal days all season long, so if you miss out, just check back later or sign up for alerts if that product goes on sale again.
What Do You Want the Holiday Season to Feel Like?
What are your fondest holiday memories as a child? Baking cookies with your grandmother on Christmas Eve, sledding with your siblings, decorating the tree or watching a holiday movie with your whole family are all simple things that don’t have to cost a thing, but the impact they leave can last a lifetime.
On the flip side, you might not even remember all the gifts you received, or whether you went to enough holiday events.
The holidays are an excellent time to practice setting boundaries and prioritizing the things that matter most for you and your family.
Here are some other tips from my blog about making the most of the holiday season on your own terms:
How to Support Your Community this Holiday Season
Smart Ways to Give Money Gifts
Charitable Giving: How to Work it into Your Life, Budget and Estate Planning
About Your Richest Life
At Your Richest Life, physician-focused financial planner Katie Brewer, CFP®, wants to help you build a successful financial future. For more information on the services offered, contact Katie today.
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