Thursday, October 26, 2017

Holiday Spending Tips

Written by  Woody Derricks, CFP®

For many of us, autumn is filled with outdoor activities, spending time with extended family, and the start of an expensive holiday season. Before you hit the mall on Black Friday or make your online purchases on Cyber Monday, consider these tips for getting the most out of your holidays while minimizing your expenses.

1) Setting a budget – Before the holidays begin, consider creating a list of everyone for whom you would like to buy a gift and then assign a dollar amount as a target for each person. Make sure that the total value of all of those gifts is within your means. If not, you may need to reduce your spending or reduce the number of people on your list.

When you’re buying gifts, don’t spend based on the recipient’s budget. You may have friends or family members who have higher incomes and/or who don’t have children. Your spending should be based on your abilities not of those around you.

2) Use technology – If you’re shopping online, do a quick coupon code search or check a store’s Facebook or Twitter pages for promotions. There are also apps that allow you to scan barcodes to see if other stores nearby have the same item for less.

3) Think about different types of gifts – Gift cards may seem impersonal, but they allow for the receiver to get exactly what s/he wants and it allows you keep to your budget. Buying a gift card means that you won’t have to worry about taxes or spending a few extra dollars here and there, because that will add up.

If you prefer something more personal, you can spend time with your relatives rather than giving expensive gifts. Most parents and grandparents get more enjoyment out of time with their family then they do accumulating more stuff.

An idea for your office, family, or a group of friends is to start a Secret Santa tradition. Everyone draws the name of someone else in the group and buys a gift for that person. Utilizing a predetermined maximum price for the gift allows gifting to be fun and affordable for everyone.

4) Parties and dining out – Of course, the holidays aren’t complete without parties. You may host a party or holiday dinner or attend one. Either way, make sure to keep an eye on your budget.

Friends normally ask if they can bring anything to your party so don’t be shy. Ask friends to bring their favorite dessert or ask if they can bring an appetizer or drinks. Your friends will be happy to help and it can save you time shopping, time preparing, and money.

If you’re one to bring a gift or food to a friend’s holiday party, you may want to limit the amount of parties you attend or reduce the value of your gifts to stay within your budget.

Because the holidays often involve travel, I have found that people usually eat out more in November and December than they do in other months. Make sure to plan your meals in advance of heading to the mall or visiting your family. If you can’t eat at home before or after your travel, consider taking some food with you. At the very least, create a plan and budget for the restaurant of your choosing. Holiday travel is stressful and people tend to eat and spend more when they’re stressed.

The holidays are meant to be enjoyed and not something that causes significant stress. They definitely shouldn’t cause you to panic when you see your credit card bill in January. By planning ahead, you’re more likely to get the most out of the holidays.

Woody Derricks, CFP®

Woody Derricks, CFP®

This article is for informational purposes only and is not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation. Securities offered through LPL Financial, Member FINRA/SIPC.


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