Saving for the Season and Your Future

Calculating a healthcare budget

Are you "cash poor" because of holiday spending? Jamie offers advice on how to save and spend smartly this holiday season and beyond.

With the holidays at hand, it can be easy to get caught up in the spirit – gift giving, eating out, entertaining, holiday cards, gift exchanges, and more. A little pre–planning and deciding what's important can give you a wonderful holiday season without breaking the bank.

Be aware of what you spend

This year, make a list of everyone you would normally buy gifts for. List each person and determine why you are giving a gift to each of these people. Are you giving because you truly want to – or is it because you feel you HAVE to? Are you giving an expensive gift when a card, phone call, or e–mail would do?

It's easy to get caught up in the holiday excitement when you're out shopping. This is especially true when you use a credit card. For work exchanges, talk with coworkers to see if a cookie exchange or pot-luck party may be a better idea. Share the joy of the season without all of the expense.

Prioritize how you give

Decide whom you're going to give to ‐ your immediate family, closest friends, and anyone else you feel is an absolute must. Determine what each person on the list needs or wants, how much you plan to spend, and make a list. Start your shopping as soon as possible, search the Internet for the best prices, watch the sale papers, and spend wisely.

If you normally send cards to everyone you know, reconsider this year. Not sending cards is OK these days, especially with the rising cost of cards and postage. If you do send cards, send only to those to whom it means the most, such as close friends and family you won't be seeing. Maybe this year an e‐mail to update everyone on the events of the past year would be nicer. Or a phone call might mean even more.

Entertain on a budget

Plan your holiday entertaining budget the same as you would your monthly budget. Make your shopping list and stick to it. Grocers run big sales all season long, so watch for discounted prices. And remember to buy only what's on your list.

How to spend smarter

Wrap up the year without going deep in debt by deciding who and what's important, making a budget, and sticking to it. But don't stop there. Start planning for next year by doing an in–depth review of your finances, beginning with the basics. Review and adjust your budget to ensure you're spending less than you bring home.

Some ways to save on your monthly expenses:

  • Comparison shop on your home and auto insurance. Rates are always negotiable. Ask for a detailed quote from several insurance companies. When shopping, ask for quotes with your auto and homeowners or renters combined and separate. There can be discount opportunities for bundling your insurance – home, car, rental.
  • Contact your utility company if your electric and gas bills are hard to manage. Also review your energy–saving opportunities at home. A programmable thermostat may help lower energy use. Seal all air leaks around windows and doors. And set your water heater at the recommended energy–saving level.
  • Review your monthly spending in detail and re–adjust where you can. For instance, bring your lunch a day or two and bring coffee from home.
  • Take a look at credit rates and the chance to shift to lower rates. Remember, not all offers are as they seem. Review the fine print for all fees and rate changes.
  • Set up an emergency fund equal to three to six months of your bring–home income. Only use this money in case of an emergency.
  • Get the most from your benefits and adjust as necessary. Make sure you're getting the most from your company benefits, 401(k), health savings accounts, and any other investments.
  • Review insurance needs in detail: life, disability, property. The proper types and amount of coverage are critical if other family members depend on your income.

If you have the basics under control, it's easy to start planning for the future. This year may be the time to talk to a professional. Long–term planning will let you match your savings plan to your personal goals. Happy Holidays!

About the author

Jamie Turner

Note: The information available in this article is for informational purposes only and not for the purpose of providing financial advice. Financial recommendations are provided for illustrative purposes only. You’re responsible for verifying the accuracy and suitability of all assumptions and calculations. Please seek the advice of licensed or competent individuals before making any investment or financial planning decisions. Don’t rely solely on financial or retirement information found in e-PlanProfessor.

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