Christmas is not a surprise so let’s not treat it like an emergency. Emergencies may financially destabilize us for a time. Christmas is not meant to do that. It comes and goes and normal life resumes. A decision first has to be made that you do not want to start the next year badly. If you’ve been through a tough January before, you will remember how it felt. This is not to say that you should not have a good time. Here are five tips that can help us get through the Christmas period in relatively decent financial health (Click to Tweet this thought)
- You don’t have to do it all. This period becomes a struggle because we try and do everything within a very short period. There are a lot of demands being made for both your time and money and you need to accept that you cannot please everybody. You do not need to go for every lunch or drinks invitation, party, concert, social gathering, buy gifts for everyone, visit everyone, host everyone, go on last-minute holidays etc. Let’s face it. Sometimes we try and do more than we should because we want to fit in and we crave the social acceptance. You moved into a new place this year and you are willing to cater for five parties to five different groups of people, not because they are all that important to you, but you want people to come and see where and how you live these days. You want to get the tick of approval from them. You may very well get it but will be short lived. Even after the holiday period is over, you will be left wondering what to keep doing or buying to get the same buzz. List down all the things you think you want to do and then prioritize. Truly ask yourself WHY you want to do those things. Do they really have or add value or are you just doing them because it is expected? Eliminate those that are not that important. Remember nothing good comes out of spending money trying to prove something to someone else.
- Know what you cannot afford. It is OK to simply not be able to afford it. We have a problem saying those words to ourselves, our families, our friends. There is nothing wrong with you because you cannot afford it today. It does not mean you are less of a human being. It does not mean you will never be able to do it. You just can’t do it now. How do you know you can’t afford it? Firstly, when it will jeopardize something that is more important or something that you had actually planned for. Just because the money is sitting in your account today does not mean you can afford it. You cannot throw a party and then put school fees in danger. You can’t also do it if puts the family holiday that you had planned for at risk of not happening. Both these instances are telling you that you cannot actually afford the party. If it leaves you in debt you cannot afford it. If you feel you have to borrow for something, don’t do it. Borrowing for Xmas spending is a bad idea. Borrowing to go on a holiday is an unwise financial decision. Let this be a lesson for next year on the need to start saving early. If the activity will leave you with little or no money, you can’t afford it.
- Celebrate within your means. In other words, celebrate affordably. By all means, go ahead and do the things you had financially planned for i.e. you had intentionally put aside money for. That’s within your means. If you had just spoken about going on holiday that is not a plan. Recognising that December does come with additional pressure to spend money, develop a holiday budget and track it. Don’t be caught off guard. The purpose of this budget is for you to tell your money where to go, rather than waking up in January wondering where it went. Write down what you would like to do and how much it will cost. If it is more than you can afford, cut it down or be clever with managing expenses. For example, do a pot luck where people bring food and drinks rather than cater for the expense of an entire party. Take the train rather than taking a flight. Hire a holiday house rather than a hotel. Cook at home for Xmas rather than go for overpriced lunches at hotels etc.
- Pay bills in advance. Any money that is not for holiday spending should be moved out of your current account. If possible pay for the December and January basic expenses in advance. Most people get paid early in December so they may have a lot of money sitting in the account, which leads to the false belief that there is money to spend. The balances look very healthy. However, the next payday will be at the end of January. Do your food shopping for the next two months. Pay rent, electricity, water, school fees, car insurance etc. Imagine you had no money in January, what would still need to have been taken care of? Sort that out before you start spending any money.
- January exists. As already alluded to in the last point, take care of January bills because it is coming. But also spend time this season analyzing what will be different about your life. We keep doing the same thing expecting different results and it’s time we snapped out of that. Next year’s plans should be written down before next year. If you do yours on January 10th, it’s already ten days late. Spend time painting the picture for next year. Write down your goals and more importantly the actions you will take. Having these goals in mind will also help keep your holiday activities and spending in check.
Waceke runs a program on Personal Finance. To sign up, email her at waceken@centonomy.com| Facebook/Centonomy or go to www.centonomy.com