I was in spin class the Sunday before Thanksgiving and my instructor, whom I love, said the key thing to remember this holiday season is to “maintain.” She meant it in reference to weight and fitness, but I thought (being the finance geek I am) that it was also the right message for personal financial fitness this holiday season.
We’ve all read about and maybe experienced the anxiety, blues, tension with loved ones, weight gain, “bad” parenting and other threats to our personal happiness that can occur during the holiday season. As a result of those and other realities, our financial fitness, and our mantra, “spend less than you earn,” can take a backseat to other emotional and familial needs and legitimately so.
With that in mind, and taking a page from Stacey, my spin instructor’s book, I just want you to MAINTAIN your finances. Your goal is to come into the new year, with the same amount of debt (not more), the same amount of savings (plus any year end bonus you might get) and your sanity. MAINTAIN!
Note that I’m focusing on debt and savings in this post as I will discuss cash flow next week in a post about how to budget for holiday gift-giving. The key is that you want to pay for your holiday clothes, gifts, parties, donations, celebratory food and drink, out of your monthly cash flow and not have to break into your savings, spend your annual bonus or acquire more debt.
It’s the beginning of December and the perfect time to think about this, and won’t take long to do. Here’s what I’d like you to consider this month to keep you from diving into your savings or adding to your revolving debt:
- Make a list like the guy in the big red suit. Include everything (it’s not just gifts!) that will come up for the holidays and estimate what it might cost. Do not be stingy, be as accurate as you can:
- Food and Drink
- New clothes
- Extraordinary childcare
- Travel (if not already booked)
Next week, I will show you an easy way to set an amount from December’s discretionary money to spend on the holidays, and how to track it so you do not go over. .