It’s official: The holiday season is finally upon us! While we are still certainly in the midst of a pandemic, for many of us, the holidays are likely to be a little less lonely this year. We may attend a small party, gather with family or friends, and (if nothing else) bring much more skill and creativity to our virtual celebrations. But one thing hasn’t changed: it’s likely to be a season more focused on spending than saving. I encourage you to put on your favorite holiday tunes, snuggle up by the fire (or get one started via YouTube), and take a little time to put together a spending plan that works for you both. Ask yourselves these questions:
What are our priorities? Too often, we let the holiday season take over our financial life, to the detriment of the goals that we work so hard on during the rest of the year. Before you dive into your specific plans for the holiday season, check-in on how you’re doing with the top 1-3 priorities in your financial life right now. Having these goals in mind while making your plan for the holidays allows you to put this season into perspective. Another thing that will help is identifying what makes the season the most meaningful for you. Make a list of those ‘have to’ events, traditions, or items that fill your heart.
Tip: You may be tempted to say: “I value everything: the decor, the gifts, the family get-togethers, the food, the travel. It just wouldn’t be the same without them all!” You may also be experiencing FOMO (Fear of Missing Out) or feeling like you deserve the best this year since last year’s holiday was more low-key. It’s also easy to get caught up in “shoulds” or others’ expectations. I invite you to quiet these voices down the best you can and focus on just a few things that you each value most. If you had to let everything else go except for these things, what would they be?
What might we let go of? The last 21 months has given many of us time to reflect on the things that matter most to us. It’s also likely that you realized that some of the traditions you’ve invested so much time and money in over the years didn’t matter quite as much as you thought pre-pandemic. Reflect together on the things you want to let go of this holiday season. This might mean attending fewer parties, taking a pass on a gift exchange or two, making fewer cookies, or focusing more on your immediate family than your extended one. Remember: Letting these things go doesn’t mean that they weren’t once enjoyable; it just means they are no longer serving you. Give yourself the freedom to try something new and create different traditions.
Tip: Just because you’ve come to the realization that something isn’t serving you, that doesn’t mean your family and friends have come to the same realization. Need some help saying “no?” Check out this article on how to say “no” without the guilt.
How much money do we have to work with? Now that you’ve got your priorities straightened out and you’ve let go of those “extra” commitments, check in on the finances you have available to spend during this holiday season. This might be money you’ve saved up, work bonuses, or other income sources. This isn’t the time to create a sky’s-the-limit budget that you plan to finance using credit card debt. Take stock of what’s actually in the bank.
Tip: Oftentimes, people rely on their paychecks from January and February to help them foot the bill for holiday expenses. However, these paychecks (unless they are larger than normal) tend to be spoken for with your regular expenses. Challenge yourself to only use the money you actually have available. Find it’s not enough? This is a great time to start saving up for next year’s holidays. My husband and I save a little each month so the money is there when we need it.
How will we spend it? Before creating a spending plan, I encourage you to revisit those financial priorities. Would this money be better used somewhere else in your budget? Would you rather spend a little less on gifts for one another (or forego them altogether) so you could save up for another important goal? Be sure you and your partner come to a consensus about how much you plan to spend in each category. Creating a specific budget with real numbers will make you more likely to keep to it throughout the holiday season. Need to have a tough conversation about your spending limits with friends or family? Now is the time to do it.
Tip: Don’t just budget for gifts. Be sure to include things like a larger-than-normal grocery bill, travel expenses, and holiday decor. It all adds up!