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iStock image

The holidays are upon us!  This sentence is frequently followed by an eye-roll and an unnerving sigh.  

For many, the holidays aren’t a time for carolers ‘a singing and bright red lights ‘a twinkling’, but instead headaches ‘a pounding and a sea of red numbers in our bank accounts.

The holidays don’t have to be the most expensive (or stressful) time of the year; they can still be great with a little financial planning.  

Set a realistic budget

Realistically speaking, what do you want your holiday season to look like?  

Without a proper financial plan, your vision and your reality can be two completely different things; but they don’t have to be.  

Your budget will set the stage for everything else that happens this holiday season, so this should be your starting point. 

First, make a list of all of the holiday expenses you will have (this includes wrapping paper and tape) and put a price tag on each item, that is, the maximum amount you would like to spend in each category.  

Next, think about the amount of available cash you have to cover those expenses and make sure the amount of cash matches your intended expenses.   

Make your list, check It twice

Once you have a clear budget in place, think about who is going to be on your gift list this year.  Is it necessary to buy gifts for everyone you know or can you get away with buying for immediate family and close friends only?  Many people feel pressure to buy gifts for everyone.  

However, in order to stick to your budget, it may be necessary to decrease the number of people on your list or reduce the amount to be spent on each.    

While there’s nothing wrong with getting into the giving frame of mind, try to alter the meaning a bit.  For example, instead of buying gifts for each friend, why not try a gift exchange?   

Suggest an alternative, intangible gift, such as, spending time together or offering to de-clutter and organize the room they’ve “been meaning to get to.”  

Believe me, this will go over much better than an reindeer mug. 

As you embark on your spending spree, try to stick to a ‘cash only’ system.  Credit cards feel like cash and can make it easier to overspend.     

The early bird catches the deal!

With life’s hectic schedule, we often find ourselves scrambling to find decent gifts at the last minute. 

Switch things around this year and take advantage of pre and post-holiday super sales offered on special days, such as Black Friday.  

It may seem like months away (and it is) but, why not buy next year’s holiday décor at a discounted price in January or your nephew’s train set from the clearance bin.  

You’ll save yourself some unnecessary grief and you might even be surprised to find that you’ve saved enough to buy a little something for yourself.   

Gift ideas for the frugal at heart

Sticking to your budget can be a challenge but it’s not impossible.  Get creative and try making your gifts this year.  

Your friends will appreciate the extra thought of receiving freshly baked cookies or a scrapbook of memories much more.   

If you don’t have a crafty hand, donate to a charity in someone’s name. 

The dollar amount remains anonymous to the recipient and your budget remains intact. 

On to next year

It’s never too early to begin planning for holiday spending.  Start a savings plan for next year and ring in the New Year without the eggnog and credit card hangover.  Talk to our Wealth Managers today to discuss setting up a financial plan so you can actually begin to look forward to this joyous season. 

Elyse Rayner is a Wealth Manager at AFL Investments and can be reached at 294-5738.