ENJOY THE HOLIDAYS WITHOUT FINANCIAL STRESS

As we barrel full-speed toward the holiday season, concern and anxiety about spending and finances are running high -- something being felt across many socio-economic lines. Even those who may seem to be in better financial shape are facing changes -- traditional yearly bonuses may not coming through; people are concerned about the future of a company and their job; mortgages are being reset. How can people prepare for this holiday season of celebration without overstressing themselves and their budgets?

With the frenzy of the holiday season just weeks away, now is the perfect time to get your financial bearings so that you can have a great time enjoying the season without financial stress and a January spending hangover! You know you are going to spend money -- so plan now to make sure you can spend without guilt or remorse. 

Usually we create our lists first of what we will be buying (listing out gift recipients, holiday tips we “have” to give, entertaining costs, etc)  and then create a “budget” from the bottom up. Instead, let's create the Magic Number, a top down look at your own personal financial realty. Take a look at your income stability, debt levels and cash reserves, then set your Magic Number to create an overall spending limit you can feel good about. (Think about how will this number make you feel in January!) Once you determine your Magic Number, it's much easier to balance your gift giving and purchasing decisions within this cap. Most importantly, you can now give yourself permission to spend in the context of your personal finances, so enjoy every purchase you make without feeling guilty or wondering where it fits within a hard-to-manage budget.

Once you have your number, sort out your top three holiday priorities.  Is it traveling to see family?  Gifts for the kids? Hosting Thanksgiving dinner?  Beautifully printed cards?  If you are in a relationship, have both partners write down their top priorities and compare them so you can agree on where the holiday spend is going to be directed. The Magic Number gives you the ability to have freedom to choose within a defined “container.”  You can decide to throw a huge holiday bash that uses up most of your number, but that may mean a quiet New Year's Eve and fewer gifts.  Impulse buys are now easy decisions since you’ll be able to take a pulse on where you are (vis a vis your number) to see if that spend is really worth it to you. 

Now that you've paid for and enjoyed those top priorities, you'll find yourself making some tougher choices. But don't worry, there are many easy ways to reduce your holiday spending without at all impacting the joy of the season. Here are my tips on reigning in spending without denting your holiday spirit:

1. Put your gift giving list together early and take a hard look at who is on it.  If your finances mean that you need to be a bit more selective, it's a great time to change those few relationship where you may just give out of obligation, such as your 20th annual gift exchange with your old college roommate. 


2. Consider combining with friends or family on large gift purchases.  Pooling gifts is growing increasingly common, and for very large items even giving partial funds is now socially acceptable.  Your parents may be thrilled that their children are jointly paying for half of the cruise vacation they've been excited to plan for.


3. Nothing is more personal than a homemade gift, and they can be fun for the whole family to create as well.  Food in fancy packaging or a reuseable container from Container stroe or Target, small photo books of a big event this past year or hand-decorated picture frames of the grandkids are always popular.


4. Meaningful donations:  As non-profit organizations have also been hit by the tough financial times, donations in someone's name are even more meaningful.  Or, make giving a participatory event.  Companies like donorschoose.org allow you to give a 'gift card' where the recipient gets to select the recipient of your donation.  If you have a Web site or blog, get everyone to write about where they chose to direct their money and why.  It's a great way to share the holiday spirit of giving!


5. Giving Green!  Cold hard cash can still have its place, especially for those that are only rewarded once per year.  Those service providers you thank every year have been battling with a challenging economy as well, and many very appreciate the cash gifts that they receive this time year.  While gift cards are increasingly popular and have a bit more personalization, there are those who are tired of receiving dozens of Starbuck's gift cards every year, especially if they don't drink coffee!


6. Feel good about the gifts you buy!  When you give with intention, there is no need to feel guilty about spending more on gifts that really matter to you.  It may have been expensive to buy your son the video game system he has been craving all year, but watching his face light up is one of the great feelings that make gift giving at the holidays so special.  Enjoy that you were able to splurge on him!

Participate and ENJOY!