DECEMBER IS THE month of gifts, extra partying, entertaining and lots of extra special food and drinks.
Traditionally, at this time, the house must be in good repair. Worn or outdated furniture is often replaced; purchasing new appliances and digital equipment may also be in order. After the early payday in December, and the euphoria that an extra bonus payment usually causes, it can be so easy to overspend.
The advertisements at Christmas are doubly inviting. It seems that all the major merchants keep their most exciting contests and giveaways for this period. It is virtually impossible to remain unmoved by their efforts to get into our pockets.
The quest to be happy and merry prepares the mind for spending. Most people associate these positive feelings with spending without restraint. Indeed, they see restraints and limitations as negative.
The credit card may be presented to cover the cost of impulsive and extravagant purchases that have been rationalised by the Christmas season’s good feelings.
We allow ourselves to be convinced that we can afford discretionary expenditures that may eventually stress us out for the next six to eight months in finding the instalment payments.
We extend our store credit, take loans from our bank or credit union and make a full slate of purchases. The spending attitude pervades the Christmas air just like the carols, and the shiny lights and decorations take over every building.
After Christmas is over, the debt bells start ringing in earnest.
The dilemma is how to have a happy holiday season and yet avoid overspending.
Well, there is no simple solution that will suit everyone. Each of us has to evaluate our weak areas. Do we go overboard on preparing the house, on food and drink/entertaining, on clothing and/or on gifts? Are we impulsive shoppers or ones who just cannot resist credit? Do we plan for handling our money, for our financial future, for happiness today and tomorrow?
And most importantly, are we willing to change? Are we mature enough to see Christmas Day as well as beyond?
Every effort should be made to really examine and evaluate our holiday season behaviour and adjust it for what we truly desire in the long term.
The easiest and simplest way to deal with the holidays is to have a budget and communicate with the important people in your life the extent of your participation in the celebrations.
The objective is to clarify expectations given your very real circumstances. Each of us knows our special weaknesses during the holiday season. For instance, one can make a special effort to avoid impulse shopping. Maybe by shopping with a responsible friend or relative, you can be distracted at the right moments.
What about leaving the credit card at home? When it comes to that entertaining and merriment, you can agree to have a family Dutch Christmas dinner, Old Year’s Night and other gatherings where no one person bears all the entertaining costs.
If organised well, this can promote a high sense of family goodwill.
• Louise Fairsave is a personal financial management adviser, providing practical advice on money and estate matters. Her advice is general in nature. Readers should seek advice about their specific circumstances. Email: [email protected].
