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Tuesday, November 19, 2019

How to Keep Your Holiday Budget

Stick to your holiday budget with these easy tips and start the New Year off right!

It’s so easy to get sucked into spending far more than you really wanted to around the holidays. Your granddaughter calls, tearfully explaining she can’t see you this year because she can’t afford the flight home. Your son says you’re assigned desserts for the big dinner, and you need to bring enough to feed 25. Oh, and remember how much everyone liked the cakes from Whole Foods? The kids expect a fresh tree to decorate at your house every holiday season and how could you disappoint them? And that’s before you get any gifts…

The first thing you need to do is figure out how much you can spend. If you’re living on Social Security or a pension, that’s your income. If you’re taking withdrawals from a retirement account, you need to figure out how much you can afford after food, shelter and transportation. A free budget tool like Mint is a great place to start. You don’t want to think you’ve kept a rein on your spending, only to find out the HOA dues haven’t been paid and you don’t have money for gas. Look at income and expenses, and don’t go into debt over the holiday. If that means you need to pay with cash, then do it. And if it means you have ten dollars to spread around and no more, no problem.

One benefit of aging is the realization that the holidays really aren’t about the gifts, but about the love. You may not realize that you give gifts of love all the time, and they’re free: smiles, hugs, listening quietly, waiting calmly, forgiving. Each of us has an ample supply of love to spread around at the holidays when family and friends may be at their most stressed and need some TLC. Offer your love generously around the holidays and get off to a great gift-giving start.

Bring Food, Duck Expensive Obligations

For someone with $10 to spend, we recommend food to share. Caramel popcorn and macaroni and cheese are two simple treats that won’t break the bank, and hardly anyone doesn’t like both of these goodies. You may not be Daddy Warbucks, but you’ll be warmly welcomed to the holiday gathering when you come bearing a delicious treat. If you want to go all out, mix up some salt dough (one part flour, one part salt, enough oil to bind) with the grandchildren or children. Roll it out and cut with cookie cutters, then make a hole for a ribbon to hang it on the tree. Simple, fun and a great social activity for all ages.

Now, for those obligations we outlined in the opening paragraph. It’s fine to tell your granddaughter that you’re sorry you won’t be seeing her this year, and you hope next year will be different. Ah yes, you say to your son, Whole Foods makes wonderful desserts but you’re going to bring homemade cookies this year. Instead of a fresh tree, there will be a nice bare branch you salvaged from a nearby cottonwood, and the kids can enjoy putting the ornaments on it just as much. They are welcome to bring you a little tree if they really want one. You have cleverly checked out some holiday books from the library, and you have saved old wrapping paper the kids can turn into a tree topper!

What about those gifts? The first recommendation is that if you’re traveling to a child’s house for the holiday, either order gifts online and have them delivered or give the grandchildren a dollar limit and take them shopping where they live. You won’t have to haul gifts around, returns will be easier if needed, and taking the kids to the stores gives you extra time to spend with them. Secondly, older children and adults may appreciate a donation to their favorite charity in lieu of a gift. You can stick to your budget and simply give them a card that notes your donation to such-and-such charity without specifying the dollar amount.

Here are some practical ideas for saving money on gifts:

  1. Did you know you don’t have to pay face value for a gift card? Check out Gift Card Granny or Raise to save some cash on everything from Southwest Airlines to Lowe’s. You may decide to buy some for yourself and save throughout the year.
  2. Use a cash-back credit card if you can pay it off the same month. Citi’s Double Cash card saves you 2%, or try the Discover It Cash Back card or Chase Freedom for rotating 5% off categories. Do not carry a balance; you’re better off using cash instead.
  3. Wrapping paper and ribbon can cost a small fortune. If you didn’t save some to reuse from last year, you may find the cheapest option is your local dollar store. You can also ask for paper bags at the grocery store and use that instead of wrapping paper. A little raffia instead of ribbon makes an elegant gift.
  4. Take a look around the house to see what you could reuse or repurpose. Extra wineglasses? Wrap up a couple as a gift. Ditto for kitchen gadgets you no longer use.
  5. Millennials may even award you green points if you repurpose their gift from a thrift store or eBay. You never know what treasures you’ll find, from a hand knit wool sweater to some toys for the grandkids.
  6. Low-price havens Five Below where nothing costs more than $5 and Ollie’s Bargain Outlet for closeout merchandise can save you money if they have what you need.
  7. Make a delicious gift by putting the dry ingredients for your favorite bar cookies in a jar from the dollar store and wrapping in a ribbon with instructions for how to bake them. You could substitute soup makings, dried fruit, etc.
  8. Lower your cost by gathering your family now and agreeing to have a name draw for gifts, or only gifting the grandchildren and not the adults. Cutting down on the number of gifts can make a huge difference in your budget, leaving you more relaxed and able to enjoy the season.
  9. If you are artistic and crochet, paint, knit, woodwork or have any other skill, consider giving something you’ve made to family members and friends.
  10. The internet abounds with inexpensive, practical recipes for salt and sugar scrubs, bath bombs, soap and the like. They’re not difficult to make and you can have fun scenting them and trying them out yourself. They have the added benefit of getting used up, so they don’t add to clutter or that black hole of a kitchen drawer.
  11. Give babysitting certificates. Grandparents are often the best, most trusted sitters for grandchildren. Give your child a voucher for a full day of child care, or any amount of time you’d like. You get the added bonus of additional time with a young child.

Your goal this year is to wake up January 1st and have zero more debt than you did on December 1, which is hopefully none at all. Make it clear to yourself first and then the rest of the family that you’ll give out all the hugs they want, but your purse only opens for budgeted items. You may well find that in spite (or because) of your newfound boundaries, this holiday is your best one yet.

Click below for the other articles in the November 2019 Senior Spirit

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Blog posting provided by Society of Certified Senior Advisors