Welcome to the first issue of Smart Spending! Based on our client conversations, APC is launching a newsletter specifically targeted to provide information and ideas on better budgeting, goal setting, money psychology and, well, smarter spending decisions. As always, we welcome and encourage any feedback or ideas for specific questions that we can address in future issues. Here’s to a smarter year ahead!
How are you feeling now that your holiday spending and gift-giving activity has faded and the bills have arrived? Are you trying to figure out how much you can pay on your credit card this month? Are you wishing that you had made different choices? Can you still remember everything that you bought?
Now is a great time to begin planning for your year-end gift giving and entertaining. What! You say? — Christmas is almost 11 months away! EXACTLY. The more time you have to plan and set aside savings for your holiday spending, the easier it will be. For example, if you plan to spend a total of $1500 for gifts and entertaining and you don’t start saving until October, that’s $500 a month. But if you start now, you’ll need to set aside less than $150 per month – much easier on the budget.
Another advantage to early planning is that you can buy some gifts earlier in the year if you find a good deal rather than waiting until the holiday rush is on and feeling the pressure to buy whatever you see. One exception to this is electronics – technology is constantly improving and prices are continually dropping for the same or improved features, so waiting until closer to year-end can make sense.
Now is a great time to begin planning for your year-end gift giving and entertaining.
The first step to your holiday planning is making as detailed a list as you can of the things you want to have and give. Not just the gifts for under the tree, but special holiday meals, home decorations, and charitable contributions. Also, don’t forget the “little” things like the office “secret Santa”, teacher gifts, hostess gifts for parties you attend, wrapping supplies, etc. These can really add up quickly.
Once this is done, the next step is to decide on a reasonable amount for each category. Alternatively, you can decide on the total amount to be spent and then allocate it among each area. As you actually make purchases (spending decisions) you’ll want to track these category amounts and make adjustments as needed to stay within your total spending goal.
There are almost endless methods for budgeting – and all can be applied to your holiday spending plan.
There are almost endless methods for budgeting – and all can be applied to your holiday spending plan. There are computer spreadsheets, paper ledgers, software, and internet websites. The key is to find the method that makes sense for you — the one that you will most likely use on a regular basis. See this month’s Topic Toolbox for specific examples to get you started.
Hopefully, this time next year instead of having the holiday blues you’ll be rockin’ and rollin’!
Online budget tools such as
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