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Keeping the Holidays (and Your Finances) in Balance
In most cultural traditions, the end of the year is a time to honor
and celebrate the most meaningful things in our lives -- our
spiritual connections with friends, family, and a power greater than
ourselves. But everyone knows that the pace of the holidays can be
overwhelming. We often seem to focus our activities on "things,"
rather than loved ones. We are tempted to overspend and often find
ourselves facing financial stress for months to come.
Although most holiday spending is over for 2002, now (yes, now) is a
great time to think about next year. Take an honest look at your
holiday spending. Are you comfortable with the total? What about your
debt load? What would you like to do differently next year? Here are
some ideas to consider:
Use this year's expense list as a planning tool.
Most of us underestimate what we actually spend at the holidays.
With your actual bills and receipts in hand, add up your total
holiday expenses for 2002. Then determine what you would like to
spend in 2003. Make a budget and plan ways to spread it out. When you
reach your spending limit, stick to it. Better yet, create a monthly
savings plan to avoid holiday debt in 2003.
Make lists and more lists.
Decide in advance who you are shopping for and what gifts you are
seeking. Browse catalogs and look online for gift ideas. Do NOT
browse in the stores! Once in the stores, it's easy for countless
choices and attractive merchandising to lure us into spontaneous,
Shop early and use credit cards wisely, if at all.
Shop early to compare prices and avoid hurried, unbudgeted
purchases. Pay cash if possible. If you pay with credit, use one low-
interest credit card, rather than many cards with varying rates.
Here's food for thought: if you can pay for your expenses in one
payment, it may be a good idea to use a credit card for ALL of your
holiday spending. That way, you will have an accurate, permanently
accessible record of your actual spending activities. (Remember, this
only makes sense if you can pay off those expenses before interest
Simplify the gift giving.
Suggest drawing names for a gift exchange among extended family, co-
workers, or a circle of friends. This reduces the spending demand for
everyone, and the joint party for the gift exchange is often more fun
than the presents themselves. Consider making gifts instead of buying
them, or give homemade "coupons" to friends and family members for
things you can help them with. For friends with small children,
there's nothing more valuable than a free evening of babysitting.
You need to have financial goals, and it's important to pursue a
plan to reach them. Still, remind yourself occasionally to be
thankful for what you have, right now. We can prepare ourselves the
best we can, but we can't really control the future. It is our hope
at IRA.com that, among the many gifts of the season, you find moments
of peace, gratitude, and joy.