We often talk about the importance of having a budget for our day-to-day lives. While many people may follow their budgets most of the year, when the holidays roll around, sticking to a budget often seems more challenging. Consider the following tips to end the year with your budget intact.
Budget, budget, budget! Yes, even at the holidays. Regardless of your income, you should budget all your spending, including at the holidays. Determine how much you want to spend on gifts, travel and lodging before making holidays plans or heading to the store. Remember it may be the holiday season, but you still have other expenses to cover as well.
Don’t overdo things. Gifting at the holiday season is unavoidable, but that doesn’t mean your gifts need to be expensive, and you don’t need to give to everyone. You may be known for always giving the best gifts, but if doing so is not in your budget, your family will understand. Once you know your gift-giving budget, determine how many people you want to gift to and how much you can afford to give.
Consider buildable financial gifts. Sure, it may not be as exciting as a the newest gadget, but giving your children or grandchildren the gift of savings will mean so much more long after the batteries have died on that latest electronic device. As the cost of toys and games continue to increase, $20 or even $100 won’t get you much anymore. But that same amount placed into a savings account year after year will be worth much more than a video game that may be abandoned (or outdated) after a couple months. This is especially important to consider if you have multiple children, grandchildren, nieces or nephews to gift to.
Having a goal and a plan for achieving it applies to many areas of your finances, from holiday spending to college funding and retirement planning. You may also wish to consider consulting with a Certified Financial Planner to help you create or update a budget plan for achieving a financial goal.
Improvement – As of Sept. 30, 2012, one out of every eight and a half home mortgages (11.7 percent) in the U.S. is either delinquent or is in the foreclosure process. As of Dec. 31, 2009, one out of every 6.7 home mortgages (15.0 percent) in the U.S. was either delinquent or was in the foreclosure process (source: MBA, BTN Research).
A Real Number – The nation’s unemployment rate was 7.9 percent as of Oct. 31, 2012. Every 0.5 percent decrease in our nation’s unemployment rate is equal to 778,000 Americans going back to work (source: Department of Labor, BTN Research).
The Last Month – Nineteen of the past 22 Decembers have produced a positive total return for the S&P 500. The average December performance since 1990 is a gain of 2.1 percent, the best of any month (source: BTN Research).