It’s finally here – the holiday season. You enjoy buying gifts for others … and also for yourself.

You splurge on Instagram worthy holiday gatherings – décor, food, beverages, not to mention your clothes.

It’s easy to rack up expenses as you swipe/tap your card. In the back of your mind, you’re telling yourself, “I’ll worry about it later.” You’re employed with a good income.

But wait … isn’t this attitude the same one you had last year.

Didn’t you say in January, “I can’t believe I spent that much money!”

Didn’t you promise yourself it won’t happen again?

If you’re ready to break your holiday spending cycle, here are four steps to take now.

1- Calculate how much you can realistically afford to spend.

Start by looking at your 2018 year-end credit card statement. Focus on how much you spent in December 2018. Also, check your Paypal and Amazon accounts.

Total the amount you spent. If that amount puts you in a difficult financial situation in January, then target spending less money.

For example, if you spent $1,000 last year, then target spending $800. If that amount is still beyond your comfort level, then reduce your spending more.

2- Set a limit on how much you’ll spend at each holiday event.

Start by listing all gatherings and parties you expect to attend, including entertaining at home.

When assessing your cost for these gatherings/parties, include the following items:

how much you’ll spend on gifts (don’t forget a hostess gift)

travel (e.g., ride share, flight, lodging etc.)

food and drink (including alcoholic beverages)

décor (if it’s a gathering at your home)

clothing (do you need to buy a tacky sweater?)

For savings on gifts, continue reading to #3.

For travel savings, plan ahead for discounted flights or schedule your arrival/departure during off-peak days.

For food and drinks savings, consider simplifying your menu or changing to a pot luck approach if you’re hosting an event.

For alcoholic beverages, offer a punch. Another option is to cut out hard liquor and limit your offerings to wine and beer. You can also suggest for guests to bring their own alcohol.

For gatherings at restaurants, look at the menu before you leave your house. In this way, you can decide on lower-cost options.

For décor, instead of going overboard decorating your entire house, consider decorating an area that becomes your “photo booth” for at-home gatherings.  

If you’ve convinced yourself you need something new to wear, shop sales or consignment. If your close friend or sibling wears the same size, consider swapping holiday clothing.

3- Set a “not to exceed” limit on gifts.

Begin by listing everyone you will give a gift to this year. Remember to include your dentist, doctors, house cleaner, and others that provide a service to you.

Next, set a limit on how much you’ll spend on each person. Don’t forget to include the cost for wrapping paper, bags, and bows ($3.99 here and there can add up quickly!).

Use credit card reward points when making purchases. Another idea is to buy a package of products and break them up into individual gifts (shop warehouse stores such as Sam’s or Costco for these items).

If you’re on a tight budget, consider offering your time to do daily chores or occasional house/pet sitting. Be creative.

4- Shorten your holiday card list.

If you plan to mail holiday greeting cards, estimate the cost for cards and postage. In lieu of buying cards, have your kids make the cards.

If your list is out of control, it may be time to change this tradition. Consider sending greetings electronically.

When you add the costs for #2, #3, and #4, your total amount should be equal to or less than #1. If you’re still spending too much money, review how much you intend to spend for each item and make cuts.

Drill down on #2 and #3. You may need to decline some gatherings, especially if they are out of town or at a very expensive venue.

By planning ahead and making tough choices now, you’ll start 2020 without dreading your January credit card statement. And isn’t that the way you want to begin the new decade?

Stay PEF (positive, enthused, and focused) and start 2020 in control of your finances!


Niv Persaud, CFP®, CDFA™, RICP®, CRPC®, is the Founder of Transition Planning & Guidance, LLC. Life is more than money. It’s about living the lifestyle you want and can afford. For that reason, Niv consults with clients on money, life, and work. Her approach capitalizes on techniques she learned throughout her career, including as a management consultant, executive recruiter, and financial advisor. Her services include developing spending plans, comprehensive financial plans, divorce financial reviews, retirement plans. Niv actively gives back to her community through her volunteer efforts. She believes in living life to the fullest by cherishing friendships, enjoying the beauty of nature and laughing often — even at herself. Her favorite quote is by Erma Bombeck, “When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left and could say ‘I used everything you gave me.’”

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