As I write this column the Holiday Season is fast approaching. If you’re like a lot of families, Thanksgiving almost has taken a back seat to the infamous “Black Friday,” which signals the beginning of the Christmas buying season.
But before you start leafing through all those ads and planning your shopping spree, ask yourself one question: Is it worth it? Is it worth spending a lot of money, blowing a big hole in your budget, and possibly going into debt on your credit cards just to buy “things” for your loved ones?
If you have kids at home I definitely understand wanting to buy them the presents on their Wish List. But I also would challenge you to be realistic about what you can afford, and teach your children to be realistic in their expectations, too. Nobody wants their child to be the kid at school who didn’t get the popular toy, video game console, etc. But you also don’t want to go into shock when the credit card bills start arriving in January.
One simple solution that some banks and credit unions still offer is a Christmas Club account, where you put away a few dollars every week or each payday throughout the year. It might sound simplistic, but it works. When the account matures you get a check, and that’s your Christmas budget.
Although I probably don’t agree with everything he says, the popular radio host and financial guru Dave Ramsey discuss the concept of going over budget at Christmastime at length. Ramsey’s basic point with respect to gift-giving and running up your credit cards is pretty simple: Don’t.
He further explains that if you notify friends and family in advance that you’ll be doing simpler gifts this year, you can avoid hurt/hard feelings. I would add that you should tell those same people that you don’t expect them to buy much for you, either. Some will get it; others might not — that’s OK, because they are not the ones paying your bills. No one knows better than you what you can afford, and more importantly what you can’t afford. So, if your budget doesn’t allow spending what you’d like to, it’s really OK.
Perhaps giving the gift of time itself is something you can consider. Especially if you are younger, you should know that your parents (and grandparents if you’re still fortunate enough to have them) would probably be delighted to simply spend some uninterrupted, smartphone-free, quality time with you.
Here’s a great example of what I mean: When I was younger, a huge ice storm swept through the area just a couple of days before Christmas. Thousands of people in Wayne, Holmes and surrounding counties were without power for days, even weeks, including during Christmas. But an interesting thing happened: Stories began to circulate about how families actually talked to each other, played board games together and generally interacted with each other. Some folks will tell you it was one of the best Christmases they ever had. My point is, it’s really not about the gifts, it’s about spending time with the ones you love.
Not to sound overly negative, but I’ll finish with this thought: One of the best gifts that parents can give children is a financially stable home. Survey after survey shows that money and financial issues are one of the top causes of divorce. I think that’s sad, and I would challenge everyone to set a realistic holiday budget before doing something they might regret well after the Holidays are over.
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Cody Austin
Austin Wealth Solutions