12/02/2019

How to Plan For and Stick to Your Holiday Shopping Budget

Doing more with less isn't just an association guideline

“What is the right amount for us to spend for Christmas?” Lori asked me.  Her question came in the midst of a Money Makeover I was conducting for a Fortune 500 company where I consult on their employee benefits (i.e. getting employees to make better use of their 401(k)s and other things). Lori and her husband had been chosen to receive this makeover because they were typical – they felt like they were treading water trying to save money. Instead it was just running through their fingers. And the holidays were exemplative of the problem.

“What did you spend last year?” I asked her. She ran through a mental accounting, listing the expenses both to me (and it seemed, in her head).  “Of course we buy gifts for our four children, but we’ve got a huge family. We go to lots of parties and family gatherings. We have to get gifts for our own kids – one per party, from Santa – as well as something small for each of my Aunts. Then there are the direct family members, the siblings, the friends.”

It was exhausting just hearing about it. All in, she expected she was spent about $2,000 – about 3 percent of the family’s take-home income – last holiday season.  “Do you think we could cut that in half?” she asked.  “Yes,” I answered, noting that I thought cutting it in half was actually appropriate. (Budgeting guidelines often point to 1.5 percent of annual take home income for the holidays as the right sum.) But you’re going to have to make a plan.

Please select this link to read the complete blog post from Maria Shriver.