How much did the holidays cost you? This year, the average shopper spent $313.29 in just the five days from Thanksgiving to Cyber Monday. If the high costs of the holidays are already making a dent in your wallet, the Pennsylvania Institute of Certified Public Accountants (PICPA) warns against these last-minute shopping mistakes and making things worse.
Mistake #1: Not Sticking to Your Budget
If you haven’t actually thought about how much you have already spent this year, take some time to go through receipts and see how you are managing your budget. You may need to make adjustments on who is still on your list, or adjust how much you are going to spend. Also, don’t be tempted to add to your list or go over your spending limit. Remember, a bargain on an additional present isn’t really a bargain if it breaks your budget.
Mistake #2: Omitting Some Important Costs
Holiday budgets aren’t just about presents. When making your budget, don’t forget to include the cost of travel (including flights, hotels, and gas) and other expenses. If you’re hosting holiday parties, consider your grocery costs and other expenses associated with entertaining.
Mistake #3: Succumbing to Wacky Presents
You’ll inevitably find yourself at the cash register or browsing online and you’ll notice those funny little holiday-themed items that light up or glow in the dark or play familiar holiday tunes. Don’t buy them! Whether online or at a brick-and-mortar store, the holidays are a minefield of useless presents that may seem funny or unique at the time, but inevitably will end up in somebody’s trash can. Take a deep breath, remember your budget and your good sense, and move on.
Mistake #4: Blowing Your Bonus
You’ve just found out that you’ll be getting a year-end bonus or a raise in 2019. That’s great news, but avoid celebrating by spending everything you get. It’s best to put away at least half of your bonus for longer-term goals, such as lowering debt, saving for a house or other large purchase, or saving for your children’s education or your own retirement. The PICPA offers tips on dealing with a financial windfall.
Similarly, don’t overdo credit card spending just because you know you’ll be getting a raise in the new year. Once again, keeping a longer-term perspective can help you focus on how to use that money in ways that will benefit you over time. In addition, don’t spend any part of an expected bonus or raise until it’s actually in your checking account. A company’s plans can change from year to year, so be sure you’re really going to get the windfall you expect.
Mistake #5: Forgetting that It Really Is the Thought that Counts
No matter how much you might be able to spend, gifts of time or thoughtfulness may end up being the most appreciated. If you are choosing to have a more frugal holiday this year, remember there are still many ways to spread the joy. Offer to do some housekeeping or home maintenance projects for a friend who’s pressed for time or for an older relative. Whip up batches of your favorite recipes as gifts for the family. Set a date to have a movie night with a friend or plan a family camping trip. You’ll find that gestures like these mean the most.
Your CPA Can Help
Seeking ways to make the most of your budget or achieve any important financial goal? Talk to your local CPA. He or she can offer expert advice on the financial topics that matter to you and your family. To find a CPA in your area or for more financial tips, visit www.picpa.org/moneyandlife.