The holidays are a great time to say “thanks” and show appreciation for those who help us keep our families, homes and businesses on track, keep our homes clean, help us stay fit, and help us in other ways to get through each day throughout the year. With that in mind, we updated our suggested gifts and tips for 2021 on our sister website.
Gift giving etiquette may not always be obvious when considering gifts for people outside of your friends and family, so be mindful of the message you send. Giving should show appreciation and respect. Sometimes a smile or kind word can really make someone’s day.
As Halloween passes, we know that the season of over-buying and over-eating is approaching, so it’s time to prepare. You want to enjoy being with friends and family without having the hangover of overspending, or worse, going into debt to finance all the fun.
Make the gift giving fit
with your cash management
Over-buying does not
make you happier and usually makes the recipient uncomfortable. Also, over-spending is likely to make
achieving your long-term goals more difficult, which can add to the depression
some feel at this time of year.
For gifts, “it’s the
thought that counts” rings true. Most
recipients appreciate being remembered for who they are and what they do. Think back to what you enjoyed most in past
holidays and let that guide you. This
can help you stick to your values as you think through the entire process and
devise your holiday shopping plan. The
time spent together may be far more important and rewarding than unnecessary
Have a plan
Technology and social
media can make shopping easier, but they also make it easier to overspend and
end up with credit card debt from funding your gift giving.
Budget – If you determine what you can reasonably spend and allocate that to people for whom you want to buy gifts, or give holiday tips, then you have a spending plan that should get you through. When devising your plan, go back to your financial goals to remind yourself why staying on track is so important. Include time for present wrapping to avoid time pressure that encourages splurge buying. Also, you may want to have small gifts on hand for unexpected guests. You can use budget apps, such as NerdWallet, to create a budget. When you do, stick to it!
If the people for whom
you are shopping have wish lists, follow them for ideas. And leave items in your shopping cart
overnight to take a second look and avoid regretting a splurge purchase. Ask “does the person really want or need
this?,” especially if you are shopping for yourself! (It may be wise to avoid, or at least
substantially limit, any buying for yourself.)
Be Wary of Black Friday,
Cyber Monday and other retailer tricks
If you do your
homework, you can determine if waiting in line or buying on line will be best. As stated above, create a budget and stick to
Be on the lookout for
retailer other tricks like flash sales, loyalty cards, incentives to return for
more purchases, misleading refund policies.
Similarly, procrastinating can lead to splurge buying ruled by emotions
such as the need to please everyone and get the shopping done.
With the pressure of the holidays to address all the gift giving, parties and thank yous, stay vigilant for scams. These can come in the form of bogus IRS and social security calls, credit card offers, computer software deals and fake invoices. There are many phishing sites you can use to check out whether the offers are legit.
you’re unable to tip or give a gift, a thoughtful thank you note will
acknowledge those people who are important to you. You can even make a donation in their
Brace for over-eating
and possibly even depression
This blog is does not
profess to have any expertise in psychology.
Nonetheless, we have all heard how holidays can be disappointing if not
depressing from some. The Hallmark gatherings
promised on TV or social media rarely happen in real life.
If the holidays are depressing, consider volunteering somewhere, such as a soup kitchen, or getting out for some serious exercise. Both can lift your mood as well as either help others or improve your health. Allow time to rest and recover! And try a warm drink, tea not bourbon, or a warm bath.
Take care of yourself –
it’s hard to help anyone else if you are not in good shape yourself. But if you are really experiencing
holiday depression, speaking to people can help, be that family, friends or
We wish you all the best for financially sound, and fun, holidays! And let us know if we can help you plan.
Budgets rarely work. It takes tremendous effort to accurately record all transactions so that you have a valid budget. Then, frequently, after all this effort, you rarely come back to the budget. That means that the work had no payoff. Furthermore, people often claim that they had nonrecurring expenses. Doing so, they artificially understate their expenses, not realizing each year has some nonrecurring event.
A much easier way to test savings is to take a twelve-month period, look at cash and credit card balances at the beginning and end, check for any inflows from gifts or other non-salary items, and then measure the change. Did the cash accounts go up or did the credit cards go up? That is your savings/dis-savings for that year.
Rather than doing a budget to adjust behavior, force a change. You can do that by removing money from your discretionary spending by contributing the maximum to a 401(k) plan, by an auto debit that put funds into an investment account, and other auto payments. If your credit card balances go up, then you have to make a decision to alter behavior, such as cutting entertainment, or decide to delay goals (retire later, no new car now, etc.)
How does cash flow relate to debts? Managing your debt means getting the lowest after-tax interest rate so that you pay as much principle with each payment to pay off the loan as quickly as possible. You can deduct the interest paid on a mortgage and an equity line of credit debt. You can deduct up to $2,500 of student loan debt. But you cannot deduct the interest on most other debt, unless used for your business (watch for a post on side hussles).