Monday, October 25, 2010

Ho-ho- OH!

"I tell you these things because of your prayers;
wherefore, treasure up wisdom in your bosoms...
if ye are prepared ye shall not fear."
Doctrine & Covenants 38:30

Did you know Christmas Day is exactly 2 months away from today?

Please, stop screaming. You will wake up my babies.

The average American charges everything during the holidays while mentally keeping tabs and figuring they will pay off the credit card come January. January indeed arrives, but the total on the credit card statement is inevitably higher than the mental tally. Happy New Year.

The surprise balance is usually made up of "ohmygosh, I forgot to include the sugar cookies I made for the neighbors" with some "doh- I forgot about stamps to mail out the cards" punctuated with "shoot, I still have to stuff the stockings."

What are your plans to pay for your Christmas celebrations?

Normally, this is how I recommend budgeting for the holiday: Take the total you will spend for Christmas (foods, decorations, charitable contributions, gifts) and divide it by 12. This way, you will painlessly save for Christmas the whole year long.

$300 ÷ 12 = $25 per month

This would be line item "Christmas Fund" on your budget. The easiest thing is to have it automatically transferred to a savings account specifically dedicated to Christmas. My savings account is called "Holiday Gifts," though sometimes I rename it with the dollar amount I want to save up, for example "Christmas300." The name reminds me that when I reach the balance of $300 I can reroute the automatic deposits elsewhere.

A few weeks ago, I was asked "What about if I'm just starting to budget for it? There are only 2 months left until Christmas." There are several options available (none of them being "put it on the credit card"), but the following is my favorite.

How about you decide how much you will spend for Christmas this year rather than letting your shopping list decide how much Christmas will cost?

Think on that for a bit.

If you can only set aside $150 total for Christmas in these two short months, then, work with $150. No big deal. Be honest with whomever must know. Simply tell your family "this is what we're working with this year." Next year, you can begin saving for Christmas starting in January.

How do you make Christmas work on $150 or whatever number you have? Much like the basic budget, you set your priorities.

First, what are Christmas "essentials" to you? For some people it's gifts for the family. For other people, it's throwing a party. For others, it's traveling to see relatives. For others, it's doing Sub4Santa. What is it for you? Maybe it's a live Christmas tree. Write it down. And, no, everything cannot be an "essential."

Second, what is last on your holiday priority list? Determine this because you will likely throw it out of your celebrations this year. Is it mailing out holiday cards? Is it the family photo in matching outfits? Gifts for your mail carrier and hairstylist and kids' teachers?

Third, pay for Christmas with CASH, otherwise, you will find yourself mentally rounding down receipt totals and rationalizing your overspending with holiday cheer.

Fourth, keep a record of your spending. A big clasp envelope where you can write on the outside and stash receipts inside works well.

If your budget this year is a lot lower than last year, you will be thinking and working creatively. If you feel you are not creative, then think logically. Ask friends for ideas. Give service instead of goods. Google "creative christmas gifts" or "gifts on a budget" or "homemade gifts" or whatever combination of search words fits your personality. You know the drill.

1. Choose how much money you will use for Christmas. These are your parameters to work within.
2. Decide what aspect of Christmas is most important to you (and your family). This sets your values.
3. Decide what aspect of Christmas is least important to you (and your family). This clears out distractions.
4. Pay with cash. This is your silent accountability partner.
5. Keep a record. This is your accountant.
6. Get creative. This will help create your plan.

How smart of you to get prepared for Christmas in advance! But, please, abstain from playing the Christmas tunes until after Thanksgiving.

No comments:

Post a Comment