RON: Holidays are a time for giving, and sharing and overspending. Consumers do the bulk of the damage to their budgets during the holiday season despite their best efforts to make this year different. But you don’t have to have your budget mauled at the mall. We go into the holidays with the best intentions. We want to give and share…it’s better to give than receive and yet the influences behind the spending is something different, right?
STACEY: The biggest factor behind holiday overspending is guilt. People really have to ask themselves whether buying my kids the newest hot gadget or this new pair of sneakers is really going ot make up for the fact that I feel badly I don’t spend enough time with them. The key is to be aware of how these influences are working on you and give yourself permission not to buy into them. There are better ways to spend your money. Is spending all this money on the latest toys and gadgets going to help you achieve your overall goal? Recently I was helping an underprivileged family raise money for holiday spending. This woman got 200 dollars, single mother with four children. We said, okay what do you want to spend it on? She could have bought clothes or food but she said Xbox. It make perfect sense when you look at the social pressure out there. You know, good kids have this, good parents give their kids these things. So you’re right, you have to think about how these influences are working on you and remember your bigger goals.
RON: Let’s be realistic. You have to strike a balance, you don’t want to overspend but you want to give gifts to family and friends.
STACY: I always tell people don’t spend more on the holidays than you can pay back in one month. You’re going to have to pay the credit card bill and all your other bills in January. Also if you have credit card debt, use a debit card and what you can’t afford on a debit card you simply can’t afford.
RON: I get the impression that how we spend during the holidays really puts a spotlight on our relationship with money.
STACY: There’s a lot more to our financial choices than dollars and cents. People value themselves with spending choices they make. You see reflections of how they grew up in the spending choices they make. The holidays just amplify this. People get so emotional about their spending and the things they think they have to give. But think about it, would you feel slighted if a relative gave you time babysitting or cooked you a meal instead of buying you an expensive sweater? Really think about what they mean and put that meaning back into your gifts and seriously know what you can’t afford.
RON: I’m thinking that if someone gave a donation to an org in my name. Part of me would feel, that’s interesting I didn’t get a gift but yet we have to examine the fact that someone gave something in my name and giving is what it’s all about. It’s a two way street, you can reach out and give to a charitable organization in someone’s name and hopefully there’s a lesson in that for that person.
STACY: To really not make it about dollars and cents you also get a tax donation. You can go on the internet and find sites that when you buy toys or something at these sites the money goes to breast cancer research. Put some meaning into your gifts, that’s what the holidays are all about and there’s endless ways to do this.
RON: Let’s run down and leave people with some points to start the New Year right. You say begin saving early for next year, like a Christmas club. They’re old fashioned but they work.
STACY: Christmas clubs are great. All kinds of holiday clubs are great. And the really good news about them is you can start one yourself you can allocate money to put aside for next year. Really examine your spending, create a budget, go through your spending see if there are areas you can reduce spending by 50 percent or 75 percent and put it toward debt reduction.
RON: There’s also a quiz at debtors’ anonymous.org there’s a quiz there that will help you determine whether you have problem with overspending not just during the holidays. That might be a litmus test. Start a new year’s budget. You mean by that everything from beginning to end, what you’re going to spend, not just what you’re spending on the holidays.
STACEY: New year’s is a great time to examine your finances, good time to see what’s important to you, see how money is playing into that equation, are you spending on things that really aren’t bringing you that much joy and happiness, it’s a good time to reallocate and if you stay focused on what it is you really want you’re going to stay on track.