Friday, December 6, 2013

Thrifty Thinking: Talking About Money During the Holidays

It’s the season of open wallets and busted budgets. We feel pressure to buy something for just about everybody— little Johnny, great aunt Betty, Bill in reception, the guy we see in the carpool lane every day. And nobody wants to be a Grinch. Sometimes, though, we need a little help saying “no” amid all the glad tidings and good cheer.
Kelley Long, CPA Financial Planner and member of the National CPA Financial Literacy Commission, is available to offer tips on tactfully talking money during the holidays and managing expectations so you don’t wake up to a holiday hangover come January. Among her tips:
·         Don’t give in to guilt. Have a budget and a plan. Know how much you can realistically spend, and prioritize your gift giving. If someone unexpectedly gives a gift, show sincere thanks and follow up with a handwritten thank you note. Often the time you take to express gratitude for the gift and relationship will mean more than any gift you could buy.
·         Be realistic with your kids. Listen when your kids tell Santa what they want and explain they might not get everything on their wish list. Even Santa has a budget. Also, think about plans for the next year. Are you planning a vacation? Another outing? Use the holidays to build excitement for something upcoming–a new snorkel mask for the beach, perhaps. This also helps reinforce the important financial lesson of patience and preparing for the future.
·         Be upfront with adults. Tell your friends and family that you look forward to spending time with them over the holidays. But explain you have a smaller gift budget because you’re focusing on financial goals like paying off debt. Most people face financial challenges and the conversation could help alleviate some of their own anxiety and pressure – a gift in itself.
·         Propose alternatives. Here’s a clever idea from one CPA. Instead of exchanging gifts, she and her friends get together and make soups. They catch up on life to the soundtrack of the holidays, create meals and save money, too.  In big families and workplaces, gift swaps can be a fun option. Everyone brings a gift of limited value – say, $20 – and adds it to a gift pool. People draw numbers and pick a gift. There are many approaches, some that add extra fun.
Above all else, maintain perspective.  Before you shop online or head to the mall, take a moment to quiet your mind and think about your long-term financial goals. Paying off debt? Buying a house?  Each time you prepare to make a purchase, remember those goals. It’s a helpful way to keep spending under control.

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