3 Easy Tips for Making (and Keeping) Your Holiday Budget

| December 27, 2011
By Samuel N. Asare MBA, CRPC, CMFC (December 9, 2011)  

Believe it or not, it’s that time of the year: Christmas is right around the corner! And you know what that means, right? Holiday shopping for friends and loved ones. Let’s discuss a very simple but extremely effective way to go about this process that some approach with dread and loathing, while others find the whole exercise therapeutic.

First, understand that a gift is actually a GIFT. By definition, a gift is something you give freely – with no recompense (i.e., there is no expectation of receiving anything in return). Understanding this will go a long way toward helping you avoid the unnecessary pressure and stress that people often subject themselves to when it comes to holiday gift-giving. Contrary to what some believe, I am of the opinion that the size and/or value of the gifts carried in shopping malls cannot and do not even come close to matching the care and thought that cause people to want to give Christmas gifts – or any other gifts – in the first place.

What I am suggesting is that you avoid getting bogged down by the “hot and trendy today” and “must-have gifts” crowd at the risk of running yourself and your family into financial hell. I don’t know about you, but personally, some of the most precious and memorable gifts I have ever received (and still cherish to this day) actually cost only the price of a sheet of white 8½-by-11 paper and some crayons. The pages contain words – some incorrectly spelled – and images I could not decipher until they were explained by the giver. Take a moment to look back into your own life and ponder whether you have ever received similar treasures.

Please, don’t get me wrong: it is OK, perfectly fine, even terrific to give your man an “i-something” or a very expensive watch. However, there is also nothing wrong (and it’s an equally good idea) with giving him a handwritten note telling him how much you love, respect, admire, and appreciate him. You’d be pleasantly surprised to find that the latter gift ended up earning you more mileage and goodwill than you could ever have imagined.

Second point, write down the names of those you intend to give gifts to.

Third, next to each name DO NOT write the item you intend to give them. Rather, write down HOW MUCH you intend to spend on each recipient. Then add them all up to find your total potential gift expenditure. I will leave you to determine the rest of the process, as it relates to arriving at the total figure you are willing AND able to spend, because only you can make that decision.

Once you have arrived at the total dollar amount you are comfortable with, go ahead and knock yourself out to purchase whatever meets the amount you’ve allotted for each recipient on your list.

Other people no doubt have their lists, too. But the vast majority of theirs indicate names and items, not names and dollar amounts. The result is that they spend whatever those gift items cost. You can see the difference – and understand why I advocate the exact opposite. Although this may seem quite trivial it is an extremely critical step that would keep you off the interest-paying-treadmill.

We tend to easily get extremely busy, especially during the holiday season – but please, please, please do yourself a huge favor and take a moment to look closely and carefully at your shopping receipts before leaving the store – just to be sure you paid for exactly what you intended to purchase. Just remember to move aside while doing this, particularly if there are others in line behind you, because you know what can happen if you hold someone up, right?

Be safe and have a great time with your holiday shopping!!

___________________
Samuel N. Asare is the senior strategist at Laser Financial Group, a regular columnist/commentator for various trade, professional and regional publications, author of Proven , Common-Sense Wealth Building blog, and four personal finance books. He holds an MBA and is a Chartered Retirement Planning Counselor, a Charted Mutual Fund Counselor, a Certified Treasury Professional, and a Certified Business Manager. To request your complimentary, no-obligation consultation, get straight-forward answers to your questions, or simply to receive great retirement insights, call 877.656.9111, visit LaserFG.com, or connect at facebook.com/LaserFG

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