Penny of PennyWise Coaching breaks down why holiday spending spirals and how to stop it. The average person carries $1,000-$1,400 of holiday debt into January. She walks through setting a total budget, using a sinking fund or cash envelope system, and questioning whether you need to buy for everyone.
Chapters
Hey Wise Guys, it's Penny with PennyWise Coaching. Today we're going to talk about something that sneaks up on us every year and yet happens at the same time and we shouldn't be surprised, and that is holidays. Around Thanksgiving, Christmas, Hanukkah, that time of year, we tend to spend a lot more money than maybe other months of the year.. And people have this crisis kind of feeling like, oh my gosh, it's Christmas, I need to buy Christmas presents. And yet it shouldn't be a big surprise because it happens always on December 25th. So when is the best time to plan for holiday spending? It's right now. So if it happens to be January, great, let's plan for next Christmas. If it happens to be October, whatever today is, great, let's plan for this year. So there's lots of things to take into, um, account, and I hope that you'll get my free ebook and the holiday spending plan that you can do your own budgeting. But I wanted to give you a little bit of tips around some things that I've learned over the years that kind of make it less stressful. So maybe you're a shopper who shops all year. Or maybe you're somebody who, you know, starts December 15th or 25th, 24th, um, to get your gifts in. You can find the better deals the more time you have, of course. And so if you happen to have what's called a sinking fund, you can set aside some money every single month into that sinking fund so that when you find the great deal or you have that idea for somebody, you can go ahead and get that gift whether it's June or for December. So I encourage you to figure out how much you're going to be spending, and I go into this in depth in my book, but I just wanted to kind of give you a little pointers. If you're putting things on a credit card every year, the statistics show that most people are spending around $1,000. It's probably higher than that per person for Christmas, and there's something like $1,400 of of debt that the average person is carrying into the new year and sometimes 3, 4, 5 months. So just because you found something on sale, if you put it on a credit card, it wasn't a sale, right? Especially if you're paying 25 to 29% interest on that credit card. It can— the statistics show that we spend more when we spend on a credit card. We just really don't feel it the same way that we do if we use cash or an equivalent to cash that you can see actually how much you're spending. So that great sale may actually cost you 15 to 30% more than, than the price of that ticket item if you're carrying it and paying interest on it. So plan ahead and figure out who all you're spending money on this year. There are lots of people and things in our lives that we love, and it's super easy to get caught up in the excitement of the season and that you want to buy for everybody or you feel obligated to buy for everybody, whether it's your coworkers or your neighbors or your kids' teachers or whatever. There's a whole list of ideas in the ebook and you can kind of get your head around, oh yeah, I didn't think about that, that kind of expense, right? So there's also some holiday spending tips that you'll be able to download with this as well. So I hope that you'll choose to click on that and share with your friends and get this out so that we can start being intentional with our holiday spending. So one hack, if you will, that I really believe in is either pulling cash for your Christmas expenses or setting aside it in a specific account. So one of my favorite tools that you may have heard me talk about now is called Qube Money, and it's spelled with a Q, Q-U-B-E money. And it's a spending app that is— it's tied to a bank account and you actually can put money in different buckets and different envelopes, if you will, and use it digitally. It comes with its own debit card and you can set aside money all year long from every paycheck or from a bonus or from a tax refund and then know that's what your Christmas spending is going to be. And I'll put a link to that in the email or down below here so that you can take a look at that, maybe check it out for free. They have companion cards where you and your spouse could be on the same page with how much money you're spending on groceries or gifts, and you can see it in real time once you spend it. So if you put $500 in there, every time you spend, it's going to keep deducting from that total. So in today's environment where cash has gotten a little hard to spend lately with all the online purchases— Amazon, deliveries, dining, whatever. I love cube money for the convenience of it, but still to hold us to our plan and hold us accountable to what we said we were going to spend. So I would encourage you to do that or pull cash, um, or some people buy like a dedicated, uh, gift card, like a Visa card for that season and say, okay, when the money's gone, it's gone. It would be helpful for you to write out all the people that you're going to be buying for and all the various types of expenses that come sneak up on us and, and cause added expenses. So start with a budget and create that plan. You'll see if you download this tool that you can put all the names and the types of events, whether it's travel or dinners or gift wrapping paper, whatever, so that you can really see what the cost of this holiday is. The other thing is to really get serious about, do you have to buy for everyone? Sometimes Christmas gets to be a burden instead of a blessing, and you need to really think about, do I have to pay money for gifts for every brother, sister, niece, uncle, whatever, and neighbor and friend? And those add up. And if you're not able to really afford that, if you're carrying debt on something else but you're buying gifts for somebody I'm not sure you're really doing yourself a favor for the long haul. So really do some dedicated thinking about who all do I need and want to give gifts to. I think the other important part is to have that conversation with them now, sooner than later, so that you can broach the conversation to say, hmm, maybe could we just enjoy each other's company and, or I don't know, make crafts or baked goods swap or something like that instead of always feeling this need to spend X amount of dollars because if they spent $50 on you, you need to spend $50 on them. It's, it's really a vicious cycle, and one of the best ways to really take a look at this is there's a book by Gary— Dr. Gary Chapman called The Five Love Languages. If you've never read that, I would encourage you to do that or Google search the, the little quiz that you can do to find out what your love languages are. You, you need to know what your love language is, but you also need to know what their love language is so that you can you can love on your people in the way that serves them. For me, it's acts of service. So I love gifts, but I really love when my husband does the laundry or cooks dinner, probably more so because that's speaking to my love language. So you need to know the people around you, what you think their love language is, or have them do the quiz. And maybe theirs is quality time. Maybe they would just as soon, if it's your mom or your grandma or something, that you just came over and hung out with them. They don't really need another trinket in their house, right? Or something that expires or you eat. You know, all those things can just be another thing in the process. So start having the conversation now so that it doesn't become an issue when you do have it. And maybe they'll appreciate the fact that you're bringing up this subject. So I hope this is helpful to you. If you find it helpful, I hope you'll share it with your friends and family and Encourage them to get the downloads and really start being intentional with your spending instead of making this a stressful time of year. Really, this can be a blessing and a joyful time of year. Be wise.
