The holiday shopping season is upon us, and with that comes all of the excitement and stress of gifting.
Money management at the end of the year is difficult in and of itself thanks to the fiscal year wrapping up, annual budgets waning, family visits, travel, extravagant meals, decorations and the all-important sharing of gifts.
Whether you are a budgeting pro or newly on the path of financial stability, these few remaining weeks before Christmas are essential. Use the time between now and then to get on the right path of financial freedom. Give yourself the gift of financial security this year by managing your money instead of letting it manage you.
Dave Ramsey, renowned radio host and New York Times best-selling author, recently shared five exclusive tips for holiday gift budgeting. Check them out below.
Tip No. 1: Don’t Be Caught Unaware.
“Start planning as soon as possible by putting aside money each month to cover the cost of your gifts, extra food, travel and decorations,” Ramsey explained.
“There’s not a magic number for how much to save. If you want to give a lot, then you have to save a lot. Think about how much you want to spend, divide that by the number of paychecks you will receive from now until Christmas, and that’s how much you need to save each pay period.” he added.
Face your pocketbook’s future early; be honest with yourself about how much you would like to spend, how much you can feasibly spend and how much you will spend. Keep in mind that these numbers may not all be the same and adjust accordingly. The first step to financial success of any kind is honesty.
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Acknowledge where your weaknesses reside and come to terms with your capabilities. Accept your financial profile for what it is and act prudently within the natural parameters your personal budget allows.
Tip No. 2: Set A Budget And Follow Through.
Just as with all financial goals, planning is essential. Whether you are looking to buy a new car, share presents or plan for a comfortable retirement, budgeting is the go-to answer.
For holiday gifting, Ramsey suggested to put everything down on paper: “Make a list of everyone you are buying gifts for, and assign a dollar amount to every name. Then, total it at the bottom. Mall and specialty stores have elaborate plans to get your money this time of year. So, you need a game plan for your shopping to keep you from overspending…There’s no excuse for financing Christmas!”
Tip No. 3: Leave The Plastic At Home And Pay In Cash.
Ramsey elaborated on his position of not “financing Christmas” by reinforcing his concept of cash-only budgeting.
“Put the total amount of cash from your budget in an envelope, and when the cash is gone, stop spending! It’s as simple as that. This will help keep you on budget, because if you overspend on Aunt Sue, it means Uncle Harry won’t get a gift. Just stick to the plan, and make sure no one gets left out.”
Tip No. 4: Don’t Buy For Yourself.
One frequent stumbling block for holiday shoppers is the allure of self-gifting. Make sure to focus on the task at hand and not bludgeon your budget by shopping for yourself.
“This is the season to give, not to receive … from yourself. I know you think you’re getting great bargains, but it’s not about you. Resist the temptation,” Ramsey explained. If you know you’ll be tempted, the expert suggested to “plan ahead and put yourself on your Christmas budget.”
Know yourself, your tendencies and your frequent downfalls. Success is up to you and all in the planning.
Tip No. 5: Don’t Get Bogged Down By The Budget.
“It’s okay if you’re a little short on money,” he assured.
“Stick to the cash-only plan anyway. Let’s rediscover the meaning of Christmas. It’s about more than decorations, the mall, the big dinner, and over-the-top gifts—those are the optional things we do to celebrate Christmas. You could always make gifts, give low-cost gifts, or even hand out gift certificates promising your time.”
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Ramsey said it’s best to discuss spending expectations with your family and to be open minded. “Draw names, set price limits, or get creative,” he proposed.
This year, try and refocus. Humbly look at your finances and adapt your behaviors to reflect a deep respect for your monetary wealth. Eliminate the pressure of price tags and unburden your holiday shopping budget by stripping off the unnecessary expenses and the wasteful, stress-inducing expenditures.
Instead of trying to stretch nonexistent funds beyond their means, accept where you are financially. Acknowledge that wealth is more than physical or financial possessions.