Happy Holidays,

The advertisements on the TV are full of holiday themed commercials.  My favorite this year is the WalMart commercial where the children are “freaking out” due to the wonderful gift they opened.  As a parent I can totally relate to wanting my children to Freak Out when they open that special gift they’ve been wishing for.

But let’s be honest.  Most of the Freaking out happens in January when the adults open up the credit card statements and discover that once again we’ve spent too much money.

I met with a client last week who stated Holiday spending needed to be “reined in” this year.  But, what does that mean “reined in”?  How one spouse may define reined in, may not be the same for the other spouse.  I have a friend whose husband will periodically state that “we have no money.”  Unfortunately for my friend, she truly grew up with “no money” and so she interprets this phrase as everyone is going to bed tonight hungry.

To begin a budget, you first need to define the phrases.  Then you need to establish definitive guidelines.  So everyone knows how much can be spent, and in what categories.  That’s the definition of a budget.   It doesn’t matter how much you spend, as long as it’s in the budget and everyone agrees.  Anxiety is created when you don’t know how much you can spend.

If you want to rein in your spending this year, the only way is to know how much you have to spend.  Spending during this time of year does not mean only gifts, it’s also the extra accessories and clothing for special events, the additional cost of special holiday meals, transportation to parties and events, and if your family and friends live far away, transportation to visit them.  It all adds up quickly.  So, how do you Rein In spending?  You could begin by looking at what you spent last year.  How did you feel after you spent that much last year?  And then make adjustments accordingly.

Make a plan.  Money is neutral, it’s the emotion we attach to this time of year that makes budgeting during this time of year difficult.  Remember, there are other activities, not just gift giving, that you can do to create the fun and joy of the holidays.

When you purchase expensive items, look for creative options.  Stores are offering layaway plans again.  Layaway plans may also assist in curbing the impulse of buying later in the holiday season be enabling you to buy the gift you really want at a good price.

Navigate deals.  Lots of stores advertise their sales online.  There are internet sites devoted to announcing sales, and don’t forget coupons and discounts cards.

Have a plan this year.  Open up communication between family members. Don’t forget to have fun.  Then in January when the credit card statements arrive, you won’t be freaking out with anxiety on how to pay those bills.

Wishing you all a joyous season,

Cathy L. White, EA