The gifts were bought, wrapped and given and the holidays are now behind you. Chances are, you're now looking at the bills, so it's a good time to look back at your holiday budgeting and spending:
- Did you create a budget for how much you could afford to spend—or simply buy the "perfect gift" whenever you found one?
- If you had a budget, did you or will you stick to the budget you created? If not—why not?
- If you had no predetermined budget, did you spend money you had saved—or did you go into debt to buy gifts?
It's easy to buy more and spend more than you wanted on holiday gifts and then spend most of the next year paying off credit card debt. Other people find themselves short of money they need for living expenses due to an excess of holiday generosity. But, the same can be true at other times of the year due to a special wedding or a bumper crop of birthdays.
"Overspending during the holidays or other special times is a very common practice," notes Jody Bertram, senior consultant for VITAL WorkLife. "Whatever most people gain from lavish gift giving typically doesn't make up for the stress and mental anguish caused by overspending."
Ways to Avoid Overspending
- Reset Your Expectations: Be realistic about giving what you can afford and give accordingly. "Frantically shopping for the 'perfect gift' or exhausting yourself to make this 'the best holiday/birthday/anniversary ever' can actually take a lot of the joy out of family events," cautions Bertram. "Working women, in particular, need to ask themselves if everything really needs to done exactly the way their mothers and grandmothers did them. Maybe this year, you can do a potluck or order in."
- Edit Your Gift List: If finances are tight—or even if they're not—you might want to edit down the number of people on your holiday or birthday list or draw names so you're buying for fewer people. Other strategies include setting an agreed upon spending limit, or suggesting homemade gifts or gifts of baby-sitting, car washes or dinners during the coming year.
- Use Debit Instead of Credit Cards: When you shop with debit cards, you're actually paying cash without carrying it in your wallet. CAUTION: Your bank may have given you "automatic" overdraft protection; if so, ask them to TURN IT OFF. Interest rates and fees on overdraft loans are typically very high. Without it, your bank will automatically limit your spending to what you have in your account.
If you find yourself in debt in January—or any other time of the year—ask yourself if it was worth it. If it wasn't, start planning now to take a different approach. Saving and planning ahead might make your next holiday or special event even happier—and the subsequent months debt-free.
Pathways to Well Being Call VITAL WorkLife at 800.383.1908 or access resources through your VITAL WorkLife App
