# Holiday Spending Plan Takes the Guilt Out of Giving

Dec. 8, 2015
Personal Finance
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The holiday season has arrived, bringing with it some of the biggest shopping days of the year. Each year we look forward to this time to shop for great bargains and holiday gifts. But many of us don’t plan for this financially. We go out and buy whatever we want, often just because it’s on sale. We decide we’ll deal with the consequences later.

So let’s do it differently this year. With Hanukkah underway and less than a month until Christmas, get your budget out now. Oh, you don’t like to budget? No problem, let’s call this exercise a “holiday spending plan.”

1. Calculate your expenses. List your fixed and variable expenses for the next two months in two columns. Total them up.
2. Calculate your income. Now, calculate how much income you are expecting to receive in the next two months.
3. Determine how much you can spend. Subtract your fixed and variable expenses from your total income. What is your discretionary income? Is there anything left once all the bills are paid? If the answer is yes, then that is the amount you should be able to spend on your holiday shopping spree without feeling guilty.

For instance, if your discretionary spending money at the end of one month amounts to \$500, then you should be able to spend \$1,000 on your holiday shopping. If you go out and use a credit card and charge all your purchases, the exercise is the same. You will have to pay off the credit card bill at the end of the month.

But if there is no discretionary money left in your spending plan, and you spend anyway, then you are going into debt. So what should you do? Don’t get discouraged. You should still plan on enjoying the holidays and giving gifts, but think hard about whether you really need to buy all those gifts. There are other ways to enjoy the holidays with the people you care about — you’ll just need to be creative.

Gifts don’t have to come in the form of material goods. In particular, one gift that doesn’t cost anything is time. For instance, you could volunteer in honor of friends or family members for a cause that is important to them. Or you could give the gift of your skills. For example, I am a financial planner, so I can give someone a few hours of my time to create a mini financial plan. Designing a website, preparing tax returns, making items by hand or doing home cleaning or repairs would all make great gifts. Just design a gift certificate and put it in nice envelope.

To me, the best gift one can give is a memory, and memories are priceless. Maybe you can simply spend quality time with your friends and family instead of buying them things they probably don’t even need. You can also tell them that you don’t expect any material gifts from them and you’d rather create a great memory that will last a lifetime.

Now I don’t want to sound like the “Grinch who stole Christmas” and prevent you from enjoying the holidays. But I do want you to be wise with your spending. If you are able to follow this plan, you’ll be happy you did in January. After all, no one wants to have “get rid of debt” on their New Year’s resolutions list.

Image via iStock.