Enjoy Responsibly

Don't you just love the holidays?   There's so much to enjoy - holiday parties, time with friends and family, eggnog, presents, great food, cookies, Christmas trees…and the list goes on.  

The holidays are also a season of generosity.  Need proof?  Americans spent $626 billion in holiday shopping last year.  (For perspective, the next biggest shopping season is Back To School which "only" roped in $76 billion this year.) 

The potential dark side of all that generosity is that it can conflict with financial responsibility.  If you've ever experienced a "spending hangover" in January, you know what I mean. 

So how can you avoid the hangover AND enjoy giving your loved ones really cool stuff?  

Here's 4 easy steps to avoid financial hangovers during the Holidays and for that matter anytime of the year:

  1. Know your limits - Don't spend with reckless abandon.  Know what you can afford before you get to the mall or log into Amazon.   What's your limit?  

    Holiday savings + December/January Cashflow = Holiday Spending Plan
    (If you're still paying off the holidays in February, you've spent too much.)

  2. Track your spending - FinTech (financial technology - it's athing.  Google it) makes tracking your spending so easy you have no excuse for not knowing where you spend your money.  All you need is a log in and an account aggregator service (like your Financial Zen Client Portal or Mint.com). 

  3. Stay within your limit - Once you know your limit and you're tracking your spending, stick to your spending plan.  Personally, I log into my Financial Zen Client Portal as part of my morning routine.  (Yes, I eat my own cooking.)  It takes me 45 seconds, and I get a daily update on how I'm tracking for the month.

  4. If you go over, make up for it next month - Stuff happens.  Your car will need brakes.   Your son will break his arm and need a visit to the ER.   Your golf clubs will get stolen.  Your hard drive will fry.   Your granddaughter can't live without getting a puppy for Christmas.  You won't be able to stay perfectly within your spending plan each month.   That's why you have an emergency fund - so you can have a buffer for unexpected expenses.   But in the months when stuff happens, make up for it the following month.  If you go over $500 this month, eat out a few less times next month.  

Spending hangovers are the worst.  If you follow these steps to avoid the holiday spending hangover, then you can follow them to avoid month-to-month spending hangovers.  And avoiding the month-to-month hangovers is the only way to avoid the most painful hangover of all- the retirement hangover - that's when you knock on your kid's door asking if they have room in their basement for you. 

Enjoy the friends and family and presents and good meals and giving this holiday season.  But to steal from the beer commercials - Enjoy Responsibly.