Holiday financial planning

November 5, 2009 4:47:46 PM PST
Plan and prepare your budget for this holiday season so everyone can enjoy it without taxing your wallet!

Step # 1 Gearing up the budget

  • Know where you are: 1. You may have kept your head in the sand all year about your finances. Take a look. What's available? Lots of expensive debt and little to no emergency fund are signs that holiday spending should be on cheap this year. The good news---the economy is an easy excuse. Chances are, other people feel the same and will be relieved if you call out a simpler holiday celebration option. (can offer more examples and specifics, if needed - but here's a soundbite!)

  • Name your Magic Number: whether $500 or $5,000, pick a reasonable, but concrete budget number based on what you have, where you're at and what you want to prioritize. Decide where to apply that - shopping, entertaining and going out - or everything? Bonus tip: An easy way to handle is to load that budget onto a pre-paid debit card and use that for all holiday-related purchases - from gifts, to cocktail parties, hostess gifts and the holiday turkey. Easy to use, track and not overspend!

  • Usually we create our lists first of what we will be buying (listing out gift recipients, holiday $ we "have" to give, entertaining costs, etc) and then create a "budget" from the bottom up.

  • Magic Number is based on Top down --- looking at YOUR REALITY (it has been a tough year for many) and selecting a number that fits in your finances before drafting the gift list. It is the amount you are able to spend and willing to give yourself permission to spend in the context of your personal finances.

  • Once you have your number, sort out your top three holiday priorities. Is it traveling to see family? Gifts for the kids? Hosting Thanksgiving dinner? Beautifully printed cards? If you are in a couple, have both partners write down their top priorities and compare to agree on where the holiday spend is going to be directed.

  • Load the Magic Number onto a prepaid gift card (or two if you'll be splitting the spending). Alternatively, you could set up a separate bank account or simply track your spend on your PDA or a notepad.

  • The Magic Number gives you the ability to have freedom to choose within a defined "container." You can decide to throw a huge holiday bash that uses up most of your number, but that may mean a quiet New Years and fewer gifts. Impulse buys are fine but you'll be able to take a pulse on where you are (vis a vis your number) to see if that spend is really worth it to you.

  • Once you have set your number and your priorities, you can approach the family (and/or your) friends, armed with knowledge about your holiday intentions.
Step #2 Spending Hot Button: Gift Giving
  • Confer with your closest family members and friends. Talk about what is important to you this year. Find out where you can give each other a "reprieve" for the holiday spend. Set expectations for gift giving and clearly state your plan. If you will be scaling back on gifts (compared to other years), let family know early and give them "the out." Maybe your sister does not care if she gets a gift and would prefer if you just selected something fun for her daughter.

  • Put your gift giving list together early and take a hard look at who is on it. If your finances mean that you need to be a bit more selective, it's a great time to change those few relationship where you may just give out of obligation, such as your 20th annual gift exchange with your old college roommate.

  • Consider combining with friends or family on large gift purchases. Pooling gifts is growing increasingly common, and for very large items even giving partial funds is now socially acceptable. Your parents may be thrilled that their children are jointly paying for half of the cruise vacation they've been excited to plan for.

  • Nothing is more personal than a homemade gift, and they can be fun for the whole family to create as well. Food in fancy packaging, small photo books of a big event this past year or hand-decorated picture frames of the grandkids are always popular.

  • Meaningful donations: As non-profit organizations have also been hit by the tough financial times, donations in someone's name are even more meaningful. Or, make giving a participatory event. Companies like donorschoose.org allow you to give a 'gift card' where the recipient gets to select the recipient of your donation. If you have a Web site or blog, get everyone to write about where they chose to direct their money and why. It's a great way to share the holiday spirit of giving!

  • Giving Green! Cold hard cash can still have its place, especially for those that are only rewarded once per year. Those service providers you thank every year have been battling with a challenging economy as well, and many very appreciate the cash gifts that they receive this time year. While gift cards are increasingly popular and have a bit more personalization, there are those who are tired of receiving dozens of Starbuck's gift cards every year, especially if they don't drink coffee!

  • Feel good about the gifts you buy! When you give with intention, there is no need to feel guilty about spending more on gifts that really matter to you. It may have been expensive to buy your son the video game system he has been craving all year, but watching his face light up is one of the great feelings that make gift giving at the holidays so special. Enjoy that you were able to splurge on him!

  • It is the perfect time of year to get your bearings for the holidays - before the true spirit of the season kicks in and you get lost in the world of impulse buys and running up the credit card spend. You know you are going to spend money--- we want to make sure you can spend without guilt or remorse. And enjoy yourself along the way.
Other cost saving ideas:
  • Large families can select one member's name from a hat for a present.
  • The host of a party can ask his closest friends to bring hors d'ouevres and dessert to help out.
  • Write a letter of appreciation or create a small photo album for a family member who does not care if they get gifts. (like a parent)

About Kristin C. Harad:

Kristin started VitaVie Financial Planning in 2006 to service the needs of expectant parents and families with young children. By coupling personal financial planning with coaching, Kristin eliminates her clients' anxiety around money and proactively addresses the issues that arise with the increased financial responsibility that accompanies parenthood.

Kristin has dedicated her career to working in the personal financial services arena. With nearly fifteen years of client management experience, Kristin has worked for major financial players including Charles Schwab, Visa, and Chase Bank (JP Morgan Chase). As such, she has extensive knowledge in retirement planning, credit cards (leveraging what is helpful and getting rid of what is not!), home equity products, and utilizing brokerage services in additional to more general financial planning.

Most of all, Kristin enjoys working with people to help them achieve their goals. To complement her financial knowledge, Kristin is also a trained life coach. She not only completed training through The Coaches Training Institute, but also spent time working at the school to better understand the coaching industry and how it can help in the area of financial planning.

Kristin is a CERTIFIED FINANCIAL PLANNER ? professional. She complete her Personal Financial Planning coursework at UC Berkeley and earned her Bachelors of Science in Economics from The Wharton School at the University of Pennsylvania.

Originally from Harrisburg, Pennsylvania, Kristin has been a San Francisco resident since 1997. Kristin, her husband, and her two children currently live in the Marina District.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIALPLANNER? and in the U.S. , which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.


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