The only way to not spend yourself into trouble in December, is to plan and to plan early. Don’t let November go past without putting your December strategy in place.
December, especially at Christmas and New Year, is a time when most of us spend more money than usual. We travel to go home, to visit family, to go on holiday. We buy gifts. Children are on school holidays and want to be entertained. Even if we stay at home, the holiday atmosphere can seduce us into spending more. And then there’s January waiting for you at the end of all the fun…
Here are some steps you can take to deal differently with this year’s December.
Step 1: Know what you want to do
Before you even think about money, draw up a plan for your holiday and/or festive season celebrations and activities. Take some time to really think about what you’d like to do and experience this December. If you have a spouse, partner or children, involve them too.
Ask yourself:
- What would be the ideal holiday for each of us?
- Which of our holiday traditions do we want to keep this year?
- Which of our holiday traditions do we want to change this year?
- What do we definitely NOT want to do?
- What do we definitely WANT to do?
- What expenses can we share, eg, people travelling together?
Step 2: Know how much money you have
Put your holiday plan aside and look at the money you have available for non-routine spending. How do you know what that amount is? The answer is your personal budget. If you use a monthly budget planner, it will be easy to know how much you have available for holiday spending. If not, make a list of all the bills you have to pay and the things you have to buy to get through the month. When you have that amount, you subtract it from your total income for December. The balance is – in theory – what you have to spend on holiday fun.
Step 3: Remember January
Before you go back to your holiday list, remember your December salary has to stretch all the way to the end of January. Therefore, also make a list of all your January expenses, including non-routine items like back-to-school expenses, and make sure that you know how much you need to get to January payday.
Step 4: Plan the fun
Now it’s time to look at the holiday list again. Chances are that your list will be longer than the money you have available. You can deal with this in two ways: cut back on your holiday plans or find savings in your budgeted expenses.
Here are some examples:
- If possible, put some of your subscriptions on hold for the time you will be away from home.
- Combine trips to save on fuel and parking costs.
- Plan your meals a few days in advance so that you only go shopping once, only buy the ingredients you need, and use everything you buy.
- Consider a picnic in the park instead of a restaurant meal, or join forces with a friend or family member to do bulk food preparation.
- Gifts are a huge money guzzler, and you can often save a lot by thinking about them differently. Focus on experiences rather than things or agree with your loved ones on a set amount per person.
Step 5: Know what you want to do 2.0
Having taken a really good look at all your obligations in December and January, and the money you are likely to have available, think again about your holiday plan and wish list. If necessary, call another meeting with your loved ones and discuss your list again. Share your financial realities with your partner/children/extended family/friends and, if possible and practical, invite them to influence your plans.
Step 6: Keep your eye on the money
Track your spending throughout December (even more carefully than usual) so that you always know what your money situation is. If you overspend on one day, cut back on the next few days until you are back on track. And if you show a saving, it can either be spent on a treat or, better still, help you to clear debt quicker or boost your January savings.
Give yourself the best gift this December, which is spending with a plan, and start your new year without financial stress.
