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It may seem like stores begin thinking about the holidays far too soon… but the truth is, most people should start thinking about them much sooner. Not about decorations and food and music… but about the money you are going to spend. 

 

Surprised Again!
The funny thing about the holidays is that they seem to surprise us at the same time every year… or at least, they surprise our wallets. Black Friday and Cyber Monday hit, and we spend a lot of money (sometimes money we don’t really have) on gifts and food and parties. 

 

The Offensive “B” Word! (No, not that one… Budget)
No one is suggesting that you shouldn’t spend money on those things. But right now, Black Friday and Cyber Monday are nearly two months away. However much you typically spend on your holiday festivities… doesn’t it make more sense to set aside 1/8th of that each week for the next 8 weeks, than to wait and spend your whole paycheck at once, or put the purchases on a credit card, and end up paying as much as 25% interest over the next six to twelve months? 

 

When You Plan Ahead, $300 on Black Friday is Less Than $1 Per Day
Once the holidays have come and gone, do the same thing but take a longer approach: On New Year’s Day, you’ll have roughly 48 weeks until Black Friday rolls around. Whatever amount you spend on holidays this year, divide that by the number of paychecks you’ll get over those 48 weeks and commit to setting aside that much money out of each paycheck for your holiday fund. Compared to what you set aside over the next 8 weeks, it will feel like nothing. And, since you will have money set aside for it, if you see a great deal on the perfect gift for someone long before the holidays arrive, you can go ahead and buy it… and not have to worry about it.

 

As an added bonus, when you’ve made a budget and actually have cash in-hand, you tend to be much more careful about how you spend your money. There’s something different, psychologically, about handing over physical cash in exchange for something that makes you want to be smarter and more strategic about your purchases. 
And if you have money left over after the holidays have come and gone, then your new holiday fund has a head start, so you have to set less aside for the 48 weeks until the next Black Friday.

“Budget” Isn’t a Bad Word
This is an intro into the larger subject budgeting in general. Left to its own devices, money tends to flow freely and fast. When you make a budget and tell every last cent where to go, you become the master of your financial domain, which then makes it easier to become the master of all the other aspects of your life. We’ll dive deeper into this in posts to come. Stay tuned!