Take it down a notch

Take it down a notch

It’s hard to not get caught up in the excitement of the holidays – often to your financial detriment. And the challenge of staying within your financial guardrails doesn’t go away when the kids are out of the house. Oh, those grandkids!

In the spirit of enjoying the holidays without too much financial damage, test out these five tactics that can help keep you on track. These ideas may allow you to, as my wife is fond of telling me, “take it down a notch.”

Create a gift list. Since the kids have flown the coop, we’ve done a much better job of responsible grocery shopping. We plan out our meals for the coming days, make a shopping list and faithfully – most of the time – execute the list. It’s amazing how much less you spend when you swoop in and buy solely what you planned on. Apply this same list-making technique to your holiday shopping. 

Consider financial gifts. These are gifts with staying power, such as a 529 College Savings Plan or savings account. They cost more than a toy – that could be broken by the end of the day – but offer the potential for long-term benefit. They also offer a definitive “spend” that can keep you from falling prey to momentum shopping.

Create an accountability partnership. My wife and I do a good job of balancing each other out in a lot of areas. Whether we are trying to eat right, exercise or moderate spending, two minds seem to be better than one. Typically, at least one of us will have the willpower to make the right decision at the right time. Map out how much you plan on spending for gifts, parties, food, etc., and then work together to make sure you don’t stray.  

Set reasonable limits. The last thing the holidays should do is put your family in a financial bind, so avoid exorbitant emotional purchases. Before you get caught up in the spirit of the season and begin to shop or plan your get-togethers and trips, establish a firm cap on what is to be spent. Make it stick. (Sorry, car dealers, the fancy new car with a big red bow is out of bounds this year.)

Sign a gift treaty. Not nearly as complex as a trade treaty, a gift treaty clearly delineates who is buying gifts for whom and in what price range. This can be especially handy with your extended family. If you’ve ever felt dread at figuring out what to buy your 16 nieces and nephews, you know where I’m coming from. Instead, draw names and come to an agreement. That’s the treaty part.

Happy holidays, and best of luck as you take it down a notch. 

J.J. Montanaro is a certified financial planner with USAA, The American Legion’s preferred provider of financial services. Submit questions for him online.