The best holiday gift is financial stability

As originally published in the Our Towns section of The State Journal-Register on Sunday, December 6, 2015.

John KelkerThe holiday season brings thoughts of family, delicious food, and gifts. During this time of celebration, we tend to be a little more generous and aware of the struggles around us. Unfortunately, for many this generosity can come at a cost in the form of January debt.

Sadly, most people spend more time planning what gifts they are going to buy their family than spending time planning a holiday gift budget. As a result, many of us overspend, drain our savings, and turn to credit cards to foot the bill. The result of this spending can be a pile of debt, stress and guilt that follows us into the New Year.

At United Way, one of our goals is to help families achieve financial stability and independence. Part of achieving this goal means helping individuals increase their money management skills and the holiday season provides a learning opportunity for all of us. Below are some tips we’ve put together to help this holiday season more enjoyable and be better prepared in the years to come.

  • Start with a budget: Know your limit and figure out exactly how much money you have to spend and include things such as holiday cards, meals, and charitable donations. The little extras are often forgotten and are often the items that throw your entire budget off track.
  • Prepare your holiday shopping list: After your budget has been set, it’s a good idea to create a list of everyone you intend to buy for. Don’t forget to include items like co-worker gifts and gift exchanges at parties. Leave a little extra money in your budget for people you may have forgotten. Odds are you’ve already started your holiday shopping, but it’s still not too late to prepare a budget and create an updated list.
  • Do your homework: There’s nothing worse than buying a gift at full price, only to see it on sale the next day. Before you hit the stores, compare prices for the gifts you know you want to buy. A few minutes of research can help your money work harder for you.
  • Get a head start: Procrastinating only leads to rushed shopping, overspending and buyer’s remorse. It’s much easier to make smart choices with your money when you’re not waiting until the last minute.
  • Make a payoff plan: Don’t wait until the bill comes in to think about how you will pay off holiday debt. If you must use credit cards to make holiday purchases, then take time today to plan how you are going to pay off that debt. This will reduce your stress when the bills arrive in January and will help keep your spending within limits.
  • Start saving early for next year: It may be too late to help this holiday season, but a little planning today will save you stress tomorrow. Make holiday spending a part of your household budget and start systematically setting aside money in January for holiday spending. Just $20 per week would provide you with almost $1,000 for the holidays next year.

Finances are a leading cause of stress and depression. Living within your means leads to a happier and healthier life. Moreover, living within your means during the season of giving will allow you to better enjoy the holidays without the threat of January debt hanging over your head.

Your family wins when you take a few minutes to plan and review holiday spending, and we all win when families are financially stable and independent.

John Kelker is president at United Way of Central Illinois. Look for United Way columns weekly in Our Towns.

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