Christmas Financial Planning
I was driving to work this morning and the hosts of the radio show were having a debate on whether or not it was too early for stores to put out Christmas displays. Their debate got me thinking – while it may be too early for the displays, it’s certainly not too early to start your holiday season financial planning.
So what plans should you start working on now?
Book Your Flights – If you plan to go on a trip or visit family over the holidays, start booking now before the prices go up. When you book far enough out, you may even be able to get the whole family’s flights on air miles!
Start Shopping Now – In addition to beating the crowds, you may be able to take advantage of some great sales. Store shelves need to be cleared for the new holiday merchandise so watch out for clearance events. Building your shopping list early and buying gifts over time helps to spread out the financial burden. Make a list of everyone that you want or need to buy a gift for and put it somewhere that you’ll see it every day.
Shift the Focus Away from Gifts – Do you find yourself trying to buy for the person who “already has everything”? Does dad really need another tie? Discuss gift expectations with your family and plan some events or activities instead. Consider drawing names and giving everyone one other person to buy for in your own household and set a spending limit. The reality is that most of us don’t truly need a bunch of presents and certainly don’t want our loved ones to suffer financial stress in order to provide them. Company staff parties often use the “Secret Santa” approach to gift giving and I’d encourage you to bring this same idea home.
Set Up a Budget – The extra spending at Christmas time can quickly get out of hand. If you know you’re going to need extra food for the visitors, presents, decorations and maybe even a special outfit for a party, work out a budget now so you can be prepared. Put a little bit extra in there for the unexpected and then STICK TO IT!
Set Aside Some Money – The budget that you’ve created still needs to be funded somehow. Consider setting aside a little bit of money every week to your holiday season fund. This will be a lot less painful than putting the whole bill on your credit card in December and then trying to figure out how to pay come January. Is there a way to incorporate this into your overall financial plan? Many retired clients of mine will take a small pension or RRSP account and set it up to make an annual payment in early December instead of paying out monthly throughout the year. They tend to forget about this account and then the money arrives just in time for the holiday expenses.
While it might be too early to hear Christmas Carols in the store, it’s never too early to start your holiday financial plan. A little prep work now will go a long way in December to cutting down on stress.
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