Create a Holiday Spending Plan

From Nathan Dungan creator of Money Sanity U®

For most of us the holidays will be different this year. Whether it’s missing a loved one, facing financial concerns or celebrating virtually. It’s tempting to go all-in in an effort to make up for everything that isn’t “normal”.

However, piling up debt during the holidays is a sure way to diminish holiday cheer. Even if we can pay cash for all the gifts we buy for our family and friends, it is important to ask if uncontrolled spending really delivers the happiness we expect. And we have to consider the consequences of showering our kids and others with more gifts than they can truly enjoy.

 This year consider mapping out a plan to have a joyful holiday experience without the anxiety that comes with those big post-holiday credit card bills.

 Here are a few ideas to consider:

 Set a realistic budget. How much could you spend or how much should you spend? What is a reasonable dollar amount that will provide an enjoyable holiday for everyone without feeling out of control?

 Focus on what you’re adding. Your goal isn’t to take away fun but to add joy. Brainstorm specific ways you can focus on what truly matters—spending time together, creating experiences, volunteering together, and sharing with those who have less.

 Begin at home. It's most realistic to make changes within your own household. You can gather together and raise honest questions about everyone's holiday expectations.

 Be specific. Talk about your action plan. If you have children, explain that you've set a budget for the entire holiday experience that includes gifts for family and friends, food, decorations—everything.

 Get creative. You might choose alternative ways of giving, like making a contribution to a charity in someone’s honor. Consider a “share-check,” a check given with everything filled in except the “pay to the order of.” The recipient gives the money to a charitable cause they are passionate about.

Start now. If your goal is to remake the holidays by rightsizing the number of gifts that each person receives, it’s important to talk about that before everyone is opening gifts.

While most everyone will be ready to turn the page on 2020, be sure your holiday spending is appropriate for your situation so you can start the year with a healthy outlook and a positive financial picture.

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