Debbie Monterrey and Brian Scribonia discuss how to budget for holiday spending without derailing your finances. They cover setting limits before you shop, teaching kids about money, and building a financial plan that actually works.
The holidays can always do some major damage to your budget and your bank account, but it doesn't have to be that way. We're going to get a few tips here, some common sense advice about your finances around this time of the year with Brian Scribonia of Scribonia Financial Group. Brian, thanks for joining us. What would you say is the biggest mistake that people make? Is it not having a plan?
Thanks, Debbie, first off, for having me on today. Yeah, I believe that that is one of the biggest problems people have is they go into the holidays with no planned spending. When it comes to shopping, shopping for gifts. You know, I oftentimes recommend people identifying each person on the list, how much they plan to spend on each person. You know, identify a couple of things that they may be purchasing for that person and then most importantly, walking into that store with cash. You know, if you have cash in hand and an idea of what you're going to spend, you oftentimes will feel less regret. After you get home, look through all the things you purchased and just feel good about it. You know, what I teach my clients is to understand the purpose of every dollar that they earn so that they are able to spend without guil, making smart choices for the retirement and other financial goals.
One of the worst things we do around this time of year too, I'm sure, is we're always trying to keep up with the Joneses. Well, so and so down the street they just gave their kids this and, oh, did you hear they're going to Vail for their holiday or whatever it is. But we feel like, well, you know, our finances are our finances worse than theirs. If they can afford it, why can't we?
Right? Yeah. My clients often ask if they were on track in terms of savings compared to their peers. You know, they're just curious. I guess it's human nature to know what others are doing. You also get a lot of people who are talking with co workers, friends and relatives and trying to gain insight for how others are using their money. And the biggest problem with this approach is that it often leaves the person feeling insecure about what they're doing because it's someone else's approach to money, not yours. And in my book, Common Sense, I have an entire chapter titled Keeping up with the Joneses. Coincidentally, it covers how to establish your own personal financial identity and a system for measuring your progress in lieu of comparing yourself to other people. And that approach can help build confidence and get you moving in a positive direction.
Well, just like you, you mentioned having a List of I'm buying this gift at this price point for these people, then you can't just, you know, people like to wander around the store and think, oh, well, you know, when it, when I see it, I'll know. But people probably do that with their finances too, right? They just don't really have that game plan in effect.
Correct. And what I try to encourage people to do is identify their own personal financial identity. Everyone has a belief about money that is unique to them and they don't realize it, but it is true. Our beliefs are created by our experiences throughout our entire life. And those experiences create our beliefs or our mindset about money, which in turn affects our behavior. And that behavior with money determines our results. So that is really our financial identity, what we think and believe. And so what I try to communicate to people is that if they want to make improvements in their life, all they have to do is reestablish their beliefs and move in a positive direction. By focusing on personal financial goals and managing your money in a manner that is congruent with your goals, you can find your own financial identity and begin planning and committing to your goals.
So if your financial identity is okay, we're going to save this much for retirement, this much for the kids, college and et cetera, et cetera. And you have your list for Christmas, then you don't feel completely knocked off kilter. Like you've got to, you know, make sure that the kids have the latest iPads and all of that stuff.
That's exactly right.
Do you find, do you think it's still true that people get themselves in so much trouble around the holidays? I noticed that Black Friday shopping people, more people were shopping, but apparently people were spending less. Do you think that's a good thing or just maybe indicative that people don't have as much money as they used to?
I think it could be a combination for both. You know, Black Friday is, is. Is an interesting phenomenon, but, you know, if people go out prepared and how much they're going to spend and knowing who they're going to spend for, you know, it may be a good thing to catch a few sales for the Black Friday, but for others who are just going out without a plan, they're going to typically find themselves overspending and left dealing with the aftermath of spending.
And that's probably a bad example to set for our kids anyway, of showing them how you spend all this money that you actually haven't earned yet.
Exactly. You know, I believe personally the holidays can be a great time, a great teaching opportunity for parents to teach their kids how to manage money during the holidays. And you know, if you think about it, kids have a list of things that they're really wanting to buy. And by including them on the gift, buying for others, and discussing the budget that you have, kids can begin to connect the dots and formulate a responsible belief about money.
It is just common sense. In fact, that's the name of the book, your Guide to making Smart choices with your money by Brian Scribonia of the Scribonia Financial Group. Thanks for the tips today. We appreciate it.
