By: Ann Woodyard and John Grable
Seemingly without warning, the holiday season is in full swing. For many people, this time of year is exciting and full of anticipation. For others, the holidays are a time of worry and financial anxiety. If you are like most Americans, you probably don’t have a dedicated holiday savings account, a stated gifting budget, or a list of items to buy. This can cause stress and worry. Fortunately, there a few things you can do today to reduce the apprehension associated with the holiday season.
Let’s start with the one thing most people dislike the most: creating a budget. A budget is what you anticipate spending during the holidays. Your budget should include obvious things like gifts, as well as less obvious expenses like eating out with friends and colleagues, traveling, and doing things like going to the movies. If you know what you plan to spend, it makes it easier to say “no” when a temptation arises.
It is important to know that you will be tempted this season. Retailers, especially online companies, know what your preferences and weaknesses are, so be ready. Having a budget in place before you go shopping helps, but there may be opportunities to turn temptation to an advantage. Local stores, for example, are feeling pressure from online retailers. Some have given up and no longer promote Thanksgiving and Black Friday sales. Instead, it is more likely that brick-and-mortar retailers will be doing flash sales and unique promotions this year. Being agile is one way to take advantage of these opportunities. This means, however, that you need to spend your holiday budget very carefully. Here is a hint: don’t spend all your budget at one time. Shop around and get the best price.
Online retailers will also be offering good deals this season. Unless you are buying something that is very unique, you shouldn’t have to pay for shipping this year. The competition for your dollars is intense. This means that if you shop carefully, you are likely to get a high-quality product at a super price, shipped free, and with a “special gift” thrown in for you!
As an alternative to Black Friday, consider shopping on Small Business Saturday, which comes on Nov. 25 this year. Go to your downtown or neighborhood shops and take advantage of buying from people who live in your area. Small business owners are more likely to offer special deals on Small Business Saturday than at other times during the season. There is also satisfaction in knowing that your shopping dollars are staying in your home community.
Some shoppers are looking at this holiday season as a time to embrace simplicity. One way to stretch the holiday budget is to buy one or two meaningful gifts with a promise to do some serious “after the holiday” shopping. The prices of some things will be reduced 50 to 75 percent starting Dec. 26. One way to stay on budget and have fun is to get relatives involved in a day or two of intense shopping after the holidays. Not only will your budget be saved, you and your family might have fun while shopping for real bargains.
Although it may seem strange, one final recommendation is appropriate at this time of year: start saving for 2018! Many local banks and credit unions offer accounts where you can begin saving a small amount each week or month that can be used next year. Wouldn’t it be wonderful to start next year’s holiday with money in the bank, a holiday budget, and a plan for saving money? If nothing else, you might be more relaxed and have more fun.
Ann Woodyard and John Grable are faculty in the Master of Science in Financial Planning program.