The holidays bring us closer to loved ones, even as they can tend to drive us further away from our hard-earned cash. Money Camp Lehigh Valley is a nonprofit dedicated to teaching financial literacy to the area's youth—and for plenty of adults wondering how they missed the memo on managing money, Executive Director of Community Advocacy Princess Galarza is here with tips on wassailing worry-free through the season.
Keep Your Head
It's a time of nostalgic carols, cookie swaps, glittering garland—and pressure. We've all felt the pressure to give the perfect gift, pressure to make things magical for the kids, pressure to decorate with adequate panache.
And then there's the other side of the coin: “It's really hard to make rational financial decisions after you've binge-watched a Hallmark Christmas movie marathon,” says Galarza, “daydreaming of the perfect Christmas morning in matching PJs and the perfectly decorated holiday house.” Whether it's an indomitable holiday spirit or a
sense of obligation compelling you to excess, take a deep breath. “Managing your emotions will help you manage your spending,” Galarza says.
Start Now… for Next Year
“Ideally,” Galarza begins, “you'll start saving at the beginning of each year.” It sounds kind of horrible, but if you squirrel away a little each month, it's a lot less painful than trying to come up with $1,000 all at once.
“The first step is to review your income and expenses,” says Galarza. “Be honest with yourself about what you can afford.” Then decide how much you're willing to spend on holiday gifts, food, decorations and any travel expenses. And Galarza can't stress this enough: Never use high-interest credit cards and don't put yourself in credit card debt over the holidays.
Hide your money away from your midnight-online-shopping Mr. Hyde with a separate savings account or Christmas club and rest easy knowing it will be there for you when you need it.
Budget All Year Round
An easy rule to follow for budgeting—not just during the holidays—is the 50/30/20 rule.
50% necessities (like housing and bills)
30% wants (like dining and entertainment)
20% savings (for retirement or college)
Gift Strategically
Gift-giving is a time-honored way to show love and generosity, but that doesn't mean you have to spend yourself silly to prove you care. “Your kid will love you just as much if you give them five presents or 25,” Galarza says.
If you're not already onboard, suggest Secret Santa among your friends and adult family, leaving each person free to consider the wants and whims of just one other person. “I guarantee you,” Galarza says, “most people will be relieved.”
Take advantage of Black Friday discounts, Amazon Prime holiday sales and, if you can stand to keep a secret, buying a gift when the perfect thing comes along and the price is right could be an opportunity you pounce on in May or July.
The tradition of making gifts for family members is a creative activity you can share with your kids, and consumable treats like homemade sugar scrub, herb salt or kombucha make welcome gifts when so many are battling clutter.
Get Kids Giving
“Once kids are old enough to know who ‘Santa' really is,” Galarza says, “they're old enough to understand basic finances.”
Teens especially should be aware of your financial reality, and begin to think about prioritizing spending with their own gift budget. Getting some perspective on what things like very cool sneakers and iPhones cost is a healthy lesson for young people.
A great free way to celebrate the reason for the season with kids is to allow them to pick a volunteer activity and offer your time as a family. Working together in the spirit of giving is a great bonding experience that can instill in children the importance of thinking of others.
Experience Over Expenditure
There are plenty of other priceless ways to spend the holidays, and they're more likely to make lasting memories than another costly pair of llama-wool socks. Go on a drive to look at the lights, go sledding or have a snowball fight, bond over baking cookies or making festive crafts or check out a current holiday movie.
Hosting a little feast isn't exorbitant if you don't feel bad about keeping your guest list small. It'll be more manageable, more memorable for your guests and not require you to rent a bunch of folding chairs.
Feel free to make it a potluck and get crafty friends together to make the decorations instead of buying them.
Pack your season with wintry activities and you won't feel shortchanged by spending less.
The Expert:
Princess Galarza
Executive Director of Community Advocacy Money Camp Lehigh Valley
