(reprinted and updated from January 2012 – the message is still very timely!)
Today is what some people call “Holiday Hangover Monday”. If you find yourself draggy, dull-witted and totally not into your normal day-to-day life, you might be suffering from a holiday hangover. If you are asking yourself, “Why oh why did I spend so much this past gift-giving season”, take comfort in the fact that you are not alone. Most people get caught by the Merchandising Marauder every November and December. His voice says “Buy! Buy! Buy!!!” and he’s very hard to resist.
While I can’t help with what’s past, I can help with the future. If you want to free yourself from the grasp of this Merchandising Bandit, then follow this simple plan.
Remember Christmas Savings accounts? When I was young, my parents used to put aside a certain amount of money each month in a separate savings account. From January to October, they quietly and consciously set aside money in order to have money to spend on year-end gift giving. This was in the days before credit cards and automatic pay day loans. This was a world where you paid for things as you went along. If you didn’t have the funds, you went without. Remember? It really wasn’t that long ago.
I’d like to suggest that we return to a few of those “good old days” themes. Now I’m all for the modern conveniences of credit cards and debit cards and EFT deposits and withdrawals, but I am also in favor of the old fashioned ways of buying only what you could afford and living within your means. I’d like to introduce you to a plan of action that incorporates BOTH the old and the new.
Step 1: Look back over what you spent on holiday gifts this year. Write it all down and add it all up. Don’t judge – just compile the list. Did you give your sister a sweater this year? How much did you spend, including sales tax? What about all the other people you exchanged gifts with? Add any special “one-time only” purchases for yourself, such as that special two for one sale on massages – enjoy one now and get a freebie coupon to use in January! What about gift wrapping paper, holiday meals, liquor and other party items? Remember, I said don’t judge – just write!!! Look at your check register, your last few months’ credit card statements, and your November and December bank account statements. Figure it out, this is step one.
Step 2: Breathe! OK, so it’s all written down, you’ve added it all up, and that big fat number is sitting in front of you, staring you in the face. Saying, “SEE, LOOK, AREN’T I BIG AND UGLY AND SCARY??? Take a deep breath. Take another deep breath. Now relax. Remember, this is not to scare you, or to punish you, or to make you feel bad. This is your wake-up call.
Step 3: Look back over your list and think about each item for a moment. Decide for yourself if you would like to spend about the same amount in the coming year. You will probably say, “Yes, I need to spend that amount to equal what my sister/uncle/boss is spending on me.” Ok, maybe you do and maybe you don’t. That is your call. There might be items that you choose to acknowledge as “necessary”, such as a Christmas tree, or holiday turkey, Hanukkah or Solstice decorations. There might be other things that you choose to do differently next year. Write it down now while the thoughts are still fresh in your mind and your emotions are not being bombarded with messages of buy, buy, buy. In effect you are making a draft 2014 shopping list now. Of course you can change it, massage it and make it different in another 10 months, but for now, you have a rough sketch of what your 2014 spending will look like. GREAT – you’re almost done.
Step 4: Take the total amount that you figure you will spend in Nov/Dec 2014, add a cushion of about 20% (You never know what may pop up….) and divide it by 10. That’s the amount to set aside each month in your Holiday Savings Account. Doable? Great. But, if the number is too huge, then go back and start paring down your list. Remember, the point is to live within your means. Maybe you decide that instead of equaling what you think your boss spends on you each year, you’ll do a little less. Or get creative and make your sister something instead of buying her gift. Whatever it is, give yourself room to breathe. Remember that the holiday season is supposed to be a time of giving with joy, receiving in love and genuinely caring about your neighbors and friends. It’s not a time for one-upmanship.
Step 5: Here’s where the rubber hits the road. Open up that separate savings account. NOW. This week. Not next month, or the month after. Now. And , here’s the kicker…..be sure to set up an automatic transfer from your paycheck or main bill paying account into that savings account. That’s the key to success. Automatically filling your Holiday Savings Account each month. Remember the old adage, “Pay yourself first”? Here it is in action.
Step 6: Sit back and enjoy! Know that when the holidays come around, you will be prepared with a list of what you want to buy, who you want to exchange with, what type of holiday event you want to host, and most importantly, how much you are willing to spend. And best of all, on November 1st, 2014, you can walk into your bank and pull the necessary money out of your savings account! No hangover, no aspirin required.
Feel how much lighter your load is. Feel how comfortable you are with your financial situation. You know that you’ve made a start down a new and better road. Come November, you’ll be able to say, “Happy Holidays” and really really mean it!