Well “affluenza” season is upon us and it is normally a time when we race to find the perfect present or presents for friends and family; usually racking up credit card balances in the process. This immediate gratification epidemic can be detrimental to your financial health by creating post-holiday stress and large credit card balances that need to be paid off in the New Year. Not the ideal way to launch 2016 New Year resolutions and achieve financial goals. How can you avoid the pitfalls of holiday spending and credit card debt when the marketing blitz pummels us in the weeks leading up to the holidays?
As a financial and business coach teaching financial literacy to individuals and business owners, I know that people can develop money management skills. Although some people may have inherent money saving skills because their money personality supports saving, everyone can develop a healthier relationship with their money. Yes, we do have a relationship with money and it can be positive, negative or neutral. Regardless, it is important to be aware of what this relationship is, and what your fundamental money personality is, and then develop the skills to manage your money relationship in a financially healthy way.
I had bought into the whole “affluenza” epidemic and my kids had too many presents and didn’t have a strong sense of the value of money. So I set out to Save with Santa and put the heart back into our holidays, and keep more money in my wallet! This also allowed me to keep my credit card balance to a minimum and enjoy my holidays more thoroughly.
So with the last days of holiday shopping around the corner, I would recommend a few holiday spending and saving tips to bring the true meaning of S.A.N.T.A. back into your life, and start to manage your relationship with money in a financially healthy way:
S – Spend Wisely – Don’t buy knick knacks and “on volume” just to fill the space under the tree. These things clutter the house and become “Cash in the Trash” very quickly. Have a written holiday CASH budget and stick to it! Pick one major gift for your child that is a lasting and more memorable item. Avoid spending on credit and only buy it if you have the cash for it.
A – Accountability – Your money is your responsibility. Using OPM (Other People’s Money) or credit cards for consumables comes at a very high cost. Most people don’t understand the true cost of using credit cards after you have taken 12 months to pay off the balance and the compounded interest you have paid. Remember that assets feed you and liabilities eat you.
N – Needs vs. Wants – Understand the difference between needs and wants and ensure you teach this simple concept to your children. Retailers and marketers “sell” to our wants and feed on our emotions to capture our purchasing dollar. Don’t “buy” into the buy now, pay later mantra. Put the power of delayed gratification to work. This is the cornerstone to developing healthy saving habits!
T – Time – Save Santa and the spirit of the holiday season this year by giving time to your family and friends. As time is such a valuable commodity, giving your time to your family through family traditions, volunteering at a community fundraiser such as Santa’s Anonymous and visiting with friends is one of the greatest gifts we can give over the holiday season. Remember the time value of money and that a dollar today is worth more than a dollar tomorrow… Wealthy people know that it’s not what you earn but what you keep that counts!
A – Activate Abundance – Take time this holiday season to acknowledge those important people in your life. Encourage your kids to write them a letter, poem or story to acknowledge them and why they are part of it. What a great gift! the spirit of Santa or the holiday season is about sharing what we have with others. Teach your children gratitude. When we feel abundant and grateful for what we have, we are able to give more generously of ourselves, and not buy into the “scarcity mentality” that drives consumer spending.
My children have benefited from this Saving with SANTA strategy over the years, and it has helped us avoid many of the pitfalls of holiday spending and credit card “cash” crunches in the new year. Next week, as a follow up to avoiding the pitfalls of holiday spending, I’ll share with you some additional tips and strategies on how to put a money management system in place for the new year so that you can release the stress of credit card debt, plan for prepaid vacations, and be immunized against future outbreaks of Affluenza.
Kim Deep is a financial and business coach in Edmonton who assists business owners and individuals in creating systems for smart money management and making their numbers work for their businesses. Her authentic and practical approach to systemizing money management helps her clients get clarity and take action in creating sustainable growth and profitability. As a co-facilitator of the life changing “Mastery of Self Expression” workshop with producer, director and actor, Larry Gilman, Kim supports clients in tapping into their passion and getting “real” with their needs and wants so they get what they say they want in life. Her ability to create awareness of people’s psychology around money and the relationships they have with it, are fundamental aspects of helping clients develop positive financial habits and financial independence.