Keep Your Finances Festive: A Guide to Mindfulness This Holiday Season
As the holiday season approaches, the air is filled with excitement, joy, and the unmistakable scent of spending. While the desire to spread cheer and make the season special for loved ones (and yourself) is totally understandable, it's also crucial to approach these temptations and festivities with financial mindfulness. The pressure to spend can be overwhelming, but with a strategic plan and useful boundaries, you can navigate the holidays on budget and avoid New Year’s stress. We’ve written about mindful spending and even mindfulness in other areas of life a few times before, but we wanted to share today’s blog post as a distillation of the basic rules for successful holiday spending:
Set A Realistic Budget And Keep Your Priorities Consistent:
The first step towards financial mindfulness during the holidays is to establish a realistic budget. Take a close look at your overall financial situation and determine how much you can comfortably spend on gifts, decorations, and other festive expenses. Be honest with yourself about what you can afford, and remember that the thought and effort behind a gift often mean more than its price tag.
You should ideally be moving into the end of the year with a savings surplus if you plan to spend on gifts. If you are not, remember that going into debt during the holidays is something that should be avoided at all costs. This might mean setting firm boundaries around gifting expectations with people in your life. Being open about the fact that you are being financially mindful and adhering to your means shouldn’t be a shameful topic, but even so, managing the immediate discomfort of setting those boundaries is likely much easier than managing the longer term shame and pain associated with unmanageable debt and risky financial decisions.
Finally, don’t neglect your end of year financial needs in favor of spending on gifts. Be sure you make your full 401K contributions and any tax-advantaged donations you might have planned. Once again, this category of spending has much more impactful long term benefit than a typical holiday present does, and so should be prioritized accordingly,
With Your Budget In Hand, Prioritize Spending:
Once you have a budget in place, prioritize your spending based on what matters most to you and your loved ones. Allocate funds for the most personalized gifts and experiences, and consider cutting back on less essential expenses. Remember, it's okay to say no to certain purchases if they don't align with these priorities. Instead, focus on the thought and meaning behind your presents. Consider giving personalized, homemade, or experiential gifts that create lasting memories without draining your wallet. Thoughtful gifts often have a more significant impact than expensive ones.
Many of our clients value experiences over physical possessions. Talk to your family members and loved ones about whether they would prefer a wrapped item versus planning a fun day together or a visit in 2024. Don’t be afraid to get creative with your planning and suggestions! Sustainable holiday gifting is increasingly trendy, and there are plenty of fun inspiration guides out there to help you ideate. No matter which route you go, make sure you stick to your budget so you can spend joyfully.
Plan and Shop Early:
Remember that procrastination often leads to impulse buying, which can quickly derail your budget, and makes it difficult to prioritize personalized gifts. Being mindful means starting your holiday planning and shopping early, both to take advantage of sales and discounts and to ensure that you are giving high quality presents! Planning well ahead allows you to compare prices, find the best deals, and make thoughtful choices without the rush and stress of last-minute shopping. Starting this week (if you haven’t already) is a great idea, as many Black Friday and Cyber Monday sales are still lingering around.
Leverage Technology and Apps:
Technology can be a valuable ally in staying financially mindful during the holidays. Use budgeting apps to track your spending, set spending limits, and receive alerts when you approach your budget thresholds. Additionally, explore cashback and credit card rewards programs that can provide savings on your holiday purchases.
Three things to do this week:
Make a list or spreadsheet of gift recipients now, so that you can allocate your time and money effectively over the month and ensure that everyone is taken care of.
Check your online banking and credit card apps (or other budgeting tools) and see if you can set spending limits and alerts.
Check your credit card offers, and make sure to enroll in any offers that might come in handy. You can also use these offers for gift inspiration!
Host Budget-Friendly Gatherings And Keep Your Celebrations Affordable:
One overlooked category of holiday spending is parties and events. If you're hosting a holiday celebration, there are plenty of ways to make them festive and fulfilling without overspending. Consider potluck-style dinners where everyone contributes a dish, or opt for DIY decorations and entertainment. Less conventional ideas include getting guests to pitch in a small amount of money to order food for everyone, or my family’s personal favorite: splitting a few party trays from Costco! The holidays are all about quality time and creating a warm and inviting atmosphere; they don’t have to be about extravagant displays.
Office parties, New Years Eve plans, and catch ups with old friends often bring pressure to buy new outfits or accessories. Sometimes this can feel like the easiest option in an otherwise hectic month, but you can instead use it as another great opportunity to practice mindful, sustainable thinking: simply put, we encourage you to look through your closet for a nice outfit you already own.
Again, no matter how much or little you decide to spend in this category, make sure that it’s built into your budget in the first place and that you don’t exceed your plan.
Practice Gratitude And Compassion:
The most important thing you can do this December is to embrace the true spirit of the season by focusing on gratitude and the joy of giving and spending time with loved ones. This is a great time to encourage open conversations about your budget constraints with family and friends. Chances are, they will appreciate your honesty, and many may have similar concerns themselves. Lead these conversations in the context of what you are thankful for and what you hope to be able to accomplish for yourself and others in the future. Sharing these thoughts can bring people in your life closer, allowing them to feel loved and heard.
In Summary
By approaching the holiday season with financial mindfulness, you can enjoy the festivities without the stress of overspending. Setting a realistic budget, prioritizing spending, embracing thoughtful gift-giving, planning ahead, utilizing technology, hosting budget-friendly gatherings, and practicing gratitude are all key components of a financially mindful holiday season. With these strategies in place, you can simply focus on celebrating the joy of the season instead of racking up stress, guilt and new problems in 2024.
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Madison Elliott is a UX Researcher at Google. Madison consults on data engineering and usability at Mana Financial Life Design (FLD). Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. Madison brings her combined background in cognitive science, computer science and clinical psychology with her professional UX design and engineering experience to optimize workflows at Mana FLD and improve people’s lives.