#FinancialFridays: Creating and Managing A Holiday Budget

Last week we started where most good financial decisions start… with creating a budget. A budget is a tool to help make decisions based on information about your overall financial situation.

Reviewing your budget – Make sure your budget covers the following:
• your monthly expenses,
• your expected income,
• your assets, and
• your debts.

This will provide an overview from which to make decisions. Review your budget and decide the amount of money you will use to cover all of your holiday expenses. This may be a reality check or it may be a pleasant surprise; You won’t know until you make your budget.

Creating a holiday budget – Look at your holiday priorities and allocate amounts to each priority bucket. These buckets may include food, transportation, events, gifts, etc. This will give you a chance to guide your purchases. Having buckets of costs will also give you flexibility within the buckets to make more precise decisions as your individual situation and the greater COVID-19 situation evolves. A plan is helpful to keep on track.

This is also a chance to involve your family and friends in the process. It is important to make decisions together as it helps provide shared expectations and ownership over the decisions. Here are some tips for speaking with the kids in your life about money. https://www.creditcanada.com/blog/teaching-kids-about-money

Look into alternatives that are more cost friendly – Be creative about how to fill your priority buckets. This may mean looking at free or low-cost events in your community (Make sure to consider up to date Public Health Guidelines). This may mean buying gifts secondhand or swapping unused items with friends that they can use and appreciate.

This may also mean adding games, like Auntie Maude’s Gift Exchange:

• Everyone brings a wrapped gift to the party. It can be something funny, ridiculous, wonderful, or odd. The odder the better usually. Put the gifts in a pile in the middle of the room.
• Have a few decks of cards on hand (the number of decks depends on the number of people).
• Have one person keep a full deck of cards; deal out the other decks to everyone including the deck holder.
• Have the deck holder pull a card. The people with the corresponding cards pick a gift from the pile. (ie 2 of diamonds) Do not open the gift.
• Once all the gifts have been picked from the pile, keep pulling cards. Those with corresponding cards can now exchange their presents with other presents that people have.
• Once the deck is done, make sure everyone has a gift. Now everyone opens the gift they have. It will most likely not be the one you began with.

Revisit your holiday budget regularly – Before you go out to or make large holiday purchases, revisit your budget to help focus your thoughts and plans. After your purchases, compare your receipts against your budget. Make decisions about your next purchases at that time… and write it down. Writing down decisions and goals helps to create a commitment.

Are you struggling to make ends meet? Looking to improve your financial health? Please contact our Financial Literacy Coordinator – Caroline to arrange an appointment. Interested individuals may reach out to Caroline directly at advice@unitedwaybg.com or by phone at 519-378-4773. The service is free and completely confidential.