Will you be ready for Black Friday? How about Thanksgiving, Hanukkah or Christmas?
“The holidays are filled with both joy and stress,” says Ellen Braaten, associate professor of psychology at Massachusetts General Hospital. Much of that stress comes from the financial cost of the season.
With three months until the holidays kick off, we have time to prepare. You can be one of the few who reports little or no stress because of holiday spending.
Holiday expenditures fall into what I call less-than-monthly spending, a category which also includes things like tires, vacation, insurance, back-to-school shopping and anything else you buy periodically.
Eliminating the stress and chaos of expenses that seem to sneak up on us requires planning. To make your holiday spending plan, begin by answering this question: How much money by when?
We know when we’ll begin spending – just before the fourth Thursday in November. You get to decide how much you’ll spend on holiday meals, gifts and travel.
The typical family spends about $165 on Thanksgiving and $900 on Hanukkah or Christmas. You can spend much less than the average or more depending on your financial situation.
We’ll use $700 total in our example:
Thanksgiving, $150Holiday meals and baking, $150Gifts, $350Travel, $50When budgeting for a less-than-monthly expense, estimate the cost as accurately as you can because you will be accumulating money each month, so when the time comes, you have saved what you need.
If you underestimate, you’ll be better off than having done nothing, but you’re likely to find your stress level on the rise. The same is true if you don’t use your budget to hold yourself accountable to not spending more than planned. The best way to do this is by making your purchases in cash.
Now for accumulating the money you’ll need. We’ll assume that you will get paid 11 times before Dec. 25. Adjust your calculation based upon your situation.
Divide $700 by 11 (the number of times you get paid) to determine how much you’ll need to save from each paycheck – the answer is $64. If you keep up the habit, you’ll need just $27 from each paycheck to achieve the same result the next year. If $64 seems like too much, reduce the amount you’ll spend for the holidays or figure out how you might earn extra money to make up for the shortfall.
In addition to accumulating money to prepare your finances for holiday spending, during the holiday season, try
sitting quietly for 10 minutes a day.passing on the extra cocktail(s).taking note of what you’re grateful for.keeping up your exercise routine.With these healthy habits and saving money in advance, you’ll have more joy and less stress.
Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance. www.personalfinancecoaching.com.
