Brendan Hoy recently joined MJA Financial Services as our senior financial adviser. In this article he shares his very wise holiday advice.
I’ve been a financial adviser for over a decade and every year I start to worry as the Christmas holidays approach. Which one of my clients is going to be in my office in January looking sheepish? Who will have blown up her carefully prepared savings plan? Who’s going to be suffering a credit card hangover?
The holidays can be fun without breaking the bank. It just takes a little bit of thought and planning. I know we’re starting to get down to the wire – but it’s not too late to implement these steps to protect your bank balance.
Set a Spending Limit
Decide in advance how much you can actually afford to spend over the holiday season and set a strict spending limit. Your allowance should include all those extra holiday costs: gifts, parties and travel. It’s important to set your limit before you start making lists or trolling the web for great gift ideas.
I know this sounds like a Scrooge move, but it’s not. There are plenty of ways to show your generosity and your love that don’t require you to spend more than you actually have.
Make a List – and Check it Twice
Make a list of all the expenses you expect to incur over the holiday season. Make sure the list includes all gifts, entertainment and family trips. Then make sure your list doesn’t add up to more than you spending limit. If it does it’s time to start getting creative about the gifts you give and the parties you throw. Read on for more ideas.
Don’t Go Down Every Chimney
Santa needs to buy for the entire world – you don’t! If your list includes more than a couple of people outside the immediate family then it’s getting too long. Bake a huge batch of cookies or something if you feel the need to give something to all your friends and neighbours.
Find Creative (and inexpensive) Ways to Spend Quality Time with Friends
The holidays are a time to reconnect with family and friends. Living on a budget does not need to get in the way of spending quality time with the people you love. Instead of having a party at home, why not arrange for everyone to get together at Carols by Candlelight? Organise a group volunteering day to connect in a way that also benefits the community. Have a BYO family picnic. You see….fun doesn’t have to cut into your savings account.
Brainstorm Fun (and low cost) Gift Exchanges
The joy of giving is a big part of Christmas. But a little creativity can bring joy without having to stump up for an expensive gift for every member of your extended family. Secret Santa type arrangements limit the number of gifts you need to purchase but still offer plenty of family fun. Or design something more personalised, like everyone in the family brings a photo and a short story, which is later compiled into a family book.
These days you can do your comparison shopping without even leaving home. So invest an evening in exploring your options before you actually hand over the cash. (And by the way, I would suggest where possible that you use cash. Credit cards can be deadly at this time of year.)
Keep Track of Your Spending
Remember that list you made at the start? As you make purchases jot down your spending on your list. This helps to keep you aware of how you are tracking and avoids that awful shock of an unexpected post-Christmas credit card statement.