updated on November 25, 2016
Now that (American) Thanksgiving has come and gone, many of us turn our attention to the December holiday season. We all love the holidays. In my opinion, it is the best time of year to be off work enjoying time with your family (although, a co-worker recently pointed out to me that it’s also a great time to be at work-because no one else is!).
In any case, the holidays are a wonderful time of year. As good as they are, I do appreciate that for many people, and for many reasons, the holidays can also be a tad stressful. I could never bring verbal justice to the stomach it must take to brave the Yorkdale Mall parking lot on say, Black Friday! In an attempt to help alleviate some of the stresses that are invariably linked to the holiday season, I thought I would write a posting about a very specific topic: the art of holiday spending.
There are plenty of jokes and commercials showing people opening up their January credit card bills and reacting with theatrical hilarity. A few weeks ago, I heard a comedian talking about how she is downright dangerous when she curls up to her computer with her credit card and a bottle of wine, and online shops her future away. While the joking is lighthearted it can be fair and, for lack of a better term, accurate. In other words, some of us overspend throughout the holiday season and we’re left to deal with our December actions early in the New Year.
Here are a few tips that, while obvious, might help you curtail your spending this coming season:
Use a budget
This may be an obvious suggestion, but I thought it would be a good leadoff. Budgets can be as simple or as complicated as you like. A typical strategy would be to list out everyone that you hope to buy gifts for, and to assign (and stick to) an anticipated spending total for each person. The total of all those totals should, at the very least, give you a sense of what to expect and allow you to plan accordingly. Remember, the goal here is not to completely ban your self from spending on gifts, but to try to mitigate the drastic January surprise on your credit card statement.
Pay off your credit card bills more frequently
Credit cards are wonderfully convenient and, these days, it would be difficult to live without them. That being said, the fact that we don’t see our invoices for over a month after we make our purchases is one of the biggest reasons we are shocked when it comes time to pay the piper. One strategy you can use to avoid that shock is to make more frequent payments. I like to do so using online banking (well, I use the term ‘like’ loosely). I think paying the balance of your credit card after each purchase would be overkill, but if you were to make payments, say, in line with your bi-weekly salary or even on a weekly basis, the frequency of payments may smooth out the month-end spike. More frequent payments may also add focus to your spending habits, which usually helps discourage us from making unnecessary or over-budget purchases.
Buy holiday cards at a discount store
Greeting cards are a fascinating thing. In my opinion (and I realize there are people who might disagree with me on this), they are in essence a commodity. In other words, they’re all remarkably similar. If that is the case, why spend $4.99 on each friend and family member’s card? Many of them end up in the recycle bin. Instead, consider buying your cards in bulk, or selectively at a discount store. There’s no need to buy cards with elaborate poetry. Often, a heartfelt written note could make someone’s day much grander than prescribed holiday wishes. Every discount store has a wall full of budget-saving greeting cards ready for the picking. Stop in and see what I mean – and see what you save.
As the old saying goes: It’s the thought that counts. We all want to make our loved ones feel loved and, more often than not, a gift can help you accomplish that. Like everyone, I’ve (accidentally) overspent on gifts and what I’ve learned is that in most cases smaller, simpler, well-thought-out gifts make people as happy as overelaborate and expensive ones. Look before you leap, and think before you budget buy.
In the coming weeks, you’ll likely come across several newspaper articles and even more online postings, tweets, and blogs on this same subject. You know your family better than anyone, and you know what your spending limit should be. Let’s all make it a goal this year to simplify our holiday season by spending wisely; taking time to enjoy one another’s company, and relaxing through what is many people’s favourite time of year.
Personable and professional, Brent Soucie specializes in cross-border tax and financial planning for U.S. citizens and/or Green Card holders residing in Canada, as well as Canadian residents with U.S. employment and/or property. His clients include professional athletes, entrepreneurs, and corporate executives.