The Holidays are quickly approaching, which means the sales are not too far off.
Black Friday. Small Business Saturday. Cyber Monday. Giving Tuesday. Buy More Wednesday. Ok, that one is made up, but you get my point. The sales are coming.
We are fully aware of this time of year when companies have massive sales to entice you to purchase more. Right on time for the holidays.
Most companies do not even wait until after Thanksgiving to let you know the sales. Now they let you know weeks in advance. Some items are even on sale right now. It used to be that you could not swallow your turkey fast enough before you had to run out the door to get in line. With the internet, you do not even have to leave the comfort of your own home.
Even with the advance notice, you want to make sure that the advantage of the sale is not one-sided; and if you choose to shop, it is to your advantage as well.
It’s fine to spend money on your loved ones and yourself.
It’s also fine to purchase items you planned to purchase at a discounted rate.
But buying something at a discount just because it is on sale is not saving money. It is spending less money. And because you spent less, does not mean you should buy more.
Their Business Strategy
Businesses plan for the holiday season for months. They learn your behavior and strategize what is best to get you to exchange your money for what they have. We cannot be upset with it, because their purpose is to make money. They are intentional about their objective and you should be as well.
One thing is for sure, you do not need to make up for last year. The National Retail Federation estimates that spending will increase by 9.5% ($851B) in November and December. That’s about $851B; a ton of money.
Last year is gone and we do not have to compensate for what did not occur last year. You only have now.
Your Strategy
So your strategy should be to successfully conquer Black Friday (and the other sales). Do not let Black Friday conquer you.
Here are a few ways that you can be intentional with your money during the holidays so that you can give the gifts you planned without the need to recover financially in the New Year.
1. Prepare a Gift Plan Ahead of Time
Failing to plan is planning to fail – Benjamin Franklin
These wise words are relevant for most situations but definitely holiday shopping. Planning how you spend your money in the holiday season will require a little time and focus upfront, but it will pay dividends in the long run, ie. less stress and no regrets over your finances.
One of the easiest ways to be intentional with your money this holiday season is to create a gift plan. A gift plan is a detailed guide on who will receive a gift, what it will be, and the cost. Even if you are purchasing a gift for yourself, it should be included on the gift plan.
Why? Because it needs to be included in the total cost. So take some time to think about who should be on the list. If you plan to do secret Santa this year with family and friends, add this to the list as well.
Make sure you write down or type out your gift plan. The have ‘everything in my head’ strategy is a setup for either missing something or randomly adding to the list. Remember, more is not necessarily better.
Click here to download our gift plan here. It is free!
Benefits of Using the Gift Plan
Empowers you to choose how you will respond in advance.
Reduce Stress of the Holidays
Streamline the Shopping Experience
Purchase Gifts For The People You Desire to Purchase For
2. Determine How Much You Can Spend
Now that you have a clear idea on what gifts you want to purchase and for whom along with the cost, now confirm if this cost can be covered with your current resources or holiday fund.
What is a Holiday Fund?
A holiday fund is a type of sinking fund (savings account) that you contribute to throughout the year for holiday spending. This helps you plan how much you will spend on gifts. It does not mean you have to spend all of it, but it is there if you need it.
If you did not set up a holiday fund this year do not fear, you still have time to allocate funding towards your gift plan.
Review your spending plan and identify how much discretionary (available) income you have. During this review, you may have to make some tradeoffs with other discretionary spending items in your budget to free up some money. For example, you can suspend certain streaming services for a month or two and reallocate the money there. Or you can skip the salon visit.
Remember that this can be a temporary strategy to make tradeoffs.
What is most important to this process is being honest about your spending and then making conscious choices.
If you have made all the tradeoffs you can and you are still a bit short, the other option is to increase your income. There are several quick and low start-up side hustles that you can do to increase your income. Some quick side hustle ideas you can pick up are delivery services such as Instacart, Walmart delivery, or shipt, or uber eats. This is also a good opportunity to sell some items that you no longer need. Check out postmark, eBay, or Amazon to resell.
Make it a goal to not increase your debt. Stay within your plan.
3. Record The Cost in Your Spending plan and Track It
Now that your gift plan is complete and you have reconciled how much you can spend versus what you plan to spend, next you will need to record in your spend plan. This is another step that you don’t want to just keep in your brain. Write it down and hold yourself accountable.
Transfer the money you designated or earned from side hustle activities into a separate account for holiday shopping. The purpose of this is to create an additional boundary to prevent excessive spending.
There used to be an old Army commercial that said, “What gets tracked, gets done.” Use that same motto because it is true. Track your spending according to the gift plan you prepared earlier. Document the transaction in your spending plan to keep a record of how much you have spent and should have available.
Check off on your gift plan checklist what you purchased and keep the receipt. If the receipt is a paper receipt, dedicate a regular envelope for the holiday purchases. If the receipt is electronic, create a folder in your email and save it there.
4. Use alternate ways to purchase the gifts
If the money is not in the spend plan, there may be alternate ways that you can still purchase gifts. Check your credit card company to see if you have earned enough rewards points to transfer into a gift card or exchange for cash.
Note: This is not a green light to use your credit card for the purchases, especially if you are paying down debt, but if you have a credit card that accumulates points, try to use those points to purchase a gift card or the actual gift.
Another option to supplement your spending plan is by using old gift cards. We all have some gift cards that we either forgot about or have not had a chance to use yet. It is a gift that can keep on giving. Just be careful not to give the gift card back to the person who gave it to you.
5. Use Cash
If at first you don’t succeed (with your credit card)…dust yourself off and use cash. If you know you are working on your relationship with credit and debt, then cash or a debit card needs to be your best friend.
Credit cards can be risky because it gives the illusion of increased buying power, with minimum payment requirements. If you do not stop digging, you will just get deeper and deeper. This is not to be a downer, but holiday spending can be a trigger to spend excessively so barriers need to be place.
Using cash is your best choice. A debit card or an account with a fixed amount is the next best option. There is no shame in setting boundaries.
6. Limit Marketing Tactics
Marketers know that if they can get in front of you several times a day with their advertisements, they can entice you to buy. They understand the art of suggestion so you must actively resist it. One strategy you can use to resist the temptation is to unsubscribe from the email list. Some companies send you messages three to four times a day. Limit your exposure to it and focus on other things.
Advertisers use social media to target their ideal customers. During this time, you may want to limit your time on social media. This can be hard because society is accustomed to having social media a part of our lives, but if you have not taken a break from social media then this may be a good opportunity to do it. Limit your exposure to those enticing deals. Trust if you did not need it before, you likely do not need it now.
Another marketing tactic to be aware of are the buy more to save more strategy or the buy more for free shipping. Do not buy more just to get more things that you do not need or for free shipping. If you have to spend more to qualify for free shipping, skip it or shop around. Find out shipping cost and evaluate if it is worth just paying the $5-7 shipping rather than spending $20 more on something that you did not need.
The same strategy applies to the buy two and get one free. If you only need one, then you do not need to buy another, to get one more that you do not need. Before you buy more, pause and assess if you need this at this time. If not, then do not feel pressured to buy it now.
7. Find Creative Outlets to Use Your Time Other Than Shopping
There are so many fun and affordable activities that you can do besides spending money. Instead of roaming the malls or surfing the websites for hours, choose to spend quality time with family and friends or see something new. This is a great opportunity to create new traditions and create new memories. Even though it is getting chilly outside, it does not mean you have to spend all your time in the house. This time of year is a wonderful time to get outside and see all the beautiful lights at various parks or nearby neighborhoods.
Check out this link to see other free and affordable activities you can do this holiday season.
8. Seek accountability
Accountability and responsibility are vital to reaching your financial goals. You must be accountable for what you spend and the impact that it may have on your financial goals. You are ultimately responsible for your financial decisions, but the good news is that you do not have to do it alone.
If you are struggling to stay within your plan, then ask a confidant to hold you accountable for what you said you will do. There is no shame in asking for help and if staying on track with your financial goals is an area you need support in, ask for help. Inform your accountability partner how much you plan to spend and provide them updates on your progress.
Final Thoughts
Let’s be intentional with our spending and be committed to what we say we are going to do. Instead of spending more than we need to, focus on what makes the holidays meaningful: Gratitude, Memories, and Love.
It’s been said that the best things in life are free. I would agree.
Call to Action
Download and complete your gift plan before you start shopping. Stick to your plan