When it comes to budgeting for the holiday season, it’s good to have behavioural finance expert Preet Banerjee by your side to share tips on how you can prevent a post-holiday credit card hangover! Watch the video below or scroll down to have a more budget-friendly holiday season.
Everyone’s heard the old saying: If you fail to plan, you can plan to fail.
And as we approach the holiday season, here’s one prediction you can take to the bank. Many of us will fail to plan for the extra expenses around the season, overspend, add up debt on our credit cards, and I’ll be doing interviews in the New Year talking about tackling the credit card hangover. This happens every year, like clockwork, because we fail to plan.
Plan For Next Year
If you want to break the cycle here’s my advice for you today.
Estimate what you think you will be spending money on during the holiday season. The obvious category is gifts. But extra travel expenses, host gifts if you are being entertained at someone else’s home, and extra food expenses if you’re the one entertaining. Everything over and above what you normally spend should be on your list.
Add up your estimate. Let’s say it’s $1,000. Now divide that by 52, for the number of weeks in a year, and that gives us $19.23. Round that up to $20, and starting TODAY, set up an automatic transfer of $20 into a separate savings account, ideally one that has no monthly fee because those are easy to find these days.
So YES, you’re going to start saving for next year’s holiday season before this one is over. But over the next month with money flying out the door in every which way, you’re not really going to notice it. But NEXT year, you’ll be all set.
Something BOLD For This Year
But for those of you looking for help this holiday season, I’ve got a BOLD idea. You can find lots of the standard cost cutting and budgeting tips for the holidays with a simple google search, but let’s really try something different. Let’s think BIG. And… hear me out on this MOVE THE HOLIDAY ONE WEEK LATER.
Let me build my case:
We all know that sales happen after Christmas, so you can save money if you can wait to buy presents.
And we also know that going out on New Year’s Eve is a hassle. There are extra cover charges, long wait times for taxis, or big surcharges for Uber, and what have you. (It’s way cheaper to get tanked at home!)
So you can kill two birds with one stone by moving the gift giving part of the holiday one week later to New Year’s Eve. Save money, and save hassle.
Of course, your mileage may vary relative to the age of the people you need to get on board with this plan. And if you’re dealing with a holiday traditionalist, tread carefully.
Whatever you celebrate, happy holidays!
Best known as a financial panelist on CBC’s The National, and as a weekly contributor to The Morning Show on Global, Preet Banerjee inspires others to become financially empowered. Sharing his world-class expertise and unique ability to take the complexity out of money matters, he speaks on topics including behavioural finance, neuroeconomics, and personal finance.
Interested in learning more about Preet and what he can bring to your next event. Email us at [email protected].