4 Tips to Help You Stick to Your Budget This Holiday Season

By Ann Arceo, AAMS®

While some of us may not feel like celebrating this year, others may feel like the holidays need to be extra special. In our household, we’re not spending on travel, but our gift list is longer because we want to send more presents to friends and family we won’t see in-person. We also bought some new decorations as we wanted the house to be festive while we’re spending more time at home. It can all add up to a lot, and the excitement of a new year can quickly be ruined by a large credit card bill from your December shopping spree. 

Here are a few quick tips that we’re following to manage our holiday budget:

Making a List & Checking It Twice

The first step in making a holiday budget is knowing how much you have to spend. This should ideally be cash savings and not credit cards. If you find you’re short on cash, you should consider setting up a savings account next year and contributing a small amount to it each month. Once you know how much you have to spend, the next step is to list your expenses including the gifts, decorations, wrapping paper etc. that you need to buy. If you’re over budget, then you may need to decide what you can cut such as reusing the decorations you currently have and checking out the dollar store for wrapping paper and gifts bags. 

Host a Virtual Secret Santa

My husband’s family lives out of the country so we won’t get to see them this holiday season. We decided to draw names so we could focus on buying one nice gift instead of gifts for everyone. We’ll buy it online at stores that offer free shipping and then host a Zoom party to open presents together. It’s not the same as seeing each other in-person, but we’re so grateful for technology during this time. 

Send a Treat While Also Supporting a Local Business

This year has certainly been hard for many local businesses who have had to face closures and other restrictions. Check with local restaurants, bakeries, and florists to see if they are offering delivery. You could have a meal, dessert, or flowers sent to a friend, neighbor, or loved one that you can’t get together with during this time. You don’t have to spend a lot to send someone a treat that is sure to brighten their day. 

Shop Smart

Online shopping has soared this year. While it’s certainly not the same experience as going to the store, online shopping can help you stick to your budget. It allows you to quickly check products across multiple stores to find the best price. Many stores will give you a discount code if you join their mailing list. You can also take your time and do your research, which can help you avoid buying gifts on impulse. 

The holidays can be a magical time of year, but don’t let the magic hurt your finances. If you plan ahead, make a list, and shop smart you can have a wonderful holiday without overspending. You’ll thank yourself for it in the new year. 

Tips to Prepare for your Teenager's First Car

By Kerrie Beene, CFP®

Since Oprah stopped giving cars away in 2011, we recently had to face the challenge of getting our daughter a better vehicle.  While her getting older and purchasing this car should have come as no surprise, it came faster than we wanted (we should have started earlier!!) and I wanted to share a few things we did to prepare for the purchase of the car.   

• Utilizing Savings

  • Fortunately, when she was younger we started saving money she received for Birthdays and Christmas.  At the time, we did not designate it as car savings but we knew one day it would be used on her.  Consider this option when children receive cash as a gift.

  • We eventually designated this account as the car savings. This decision helped us save even more and gain the momentum needed. It is easier to save for something when there is a specific goal in mind.

• Throwing all Extra Funds into the Savings

  • Since she was able to work while going to school, she has been able to save money.  Any extra cash she had, she threw into the savings account.    

  • As parents, we decided to participate in the momentum and began matching her savings. We were able to encourage her by adding to her savings when we were able.   

• Create a Physical Savings Chart

  • There are a ton of printable savings trackers online and you can fill them in as you go to track progress.

  • It is also a constant reminder of the end goal and will help maintain unnecessary spending on other things

• When the time arrives to Purchase, Choose a Budget!

  • There is no right or wrong here, everyone is different. But it is important to decide ahead of time or that new car smell will play with your emotions. 

    • One school of thought is: the total value of all your vehicles should not be more than half of your annual income. (If you own 2 vehicles that are worth $20,000 each, or $40,000 total, your annual income should be at least $80,000.) 

  • As a couple, we sat down and talked about what we agreed was a fair amount to spend on a car for a 17 year old student.

• Involve your Teen in the Purchasing Process

  • Begin by looking both online and in person.  You want to teach your teen how to make an informed decision on type and price.

  • Researching ahead of time plays an important role in the safety of the vehicle and the purchase price.  

  • Starting early helps control an emotional purchase.  When you are not in a hurry, you can make more informed decisions. 

• Utilize a Teachable Moment

  • As a CERTIFIED FINANCIAL PLANNER™, I know the importance of teaching money lessons to kids at an early age. Use this opportunity to teach them about the true cost of vehicle ownership.

    • Teach about auto loan interest and financing options.

    • Share your philosophy on borrowing.  Include co-signing, who makes the payments, and what happens if you do not make the payments.

    • Don’t forget to talk about the forgotten costs of vehicle ownership, such as insurance, maintenance, and fuel.