Take a pause — it’s not too late to avoid the holiday money hangover
You’re overdoing it with spending. You’re spoiling your kids and know it’s overkill. You’re spending mindlessly, with not much to show for it. You’re overcommitting to family and friends, when you should be saying no. Your debt is mounting.
If your blood pressure is rising, join the club. Holiday regret, and feelings of guilt, will negatively impact your mental health and finances. Notice there wasn’t an “or” there? Both your emotional well-being and money are intricately tied together. The better you feel, the more conscientious, and clever, you are likely to be when it comes to managing your finances.
Get grounded
Pause. Take a deep breath. To shed these awful feelings of regret and guilt, take stock of where your feelings and finances are at.
What is causing you to feel this way? How is it impacting you and your household? Do you know your part in it (what you can control)? What other factors have contributed (out of your control)? Is there anything (or anyone) else triggering the shame? Has a financial mistake been made?
Don’t dwell or judge your answers. You can’t make a plan unless you reflect and ground yourself. If a situation is triggering you, like the shopping mall or a now-soured friendship, remove yourself. It’ll help to clear your mind for this next part.
Jot down all your accounts and their balances (including money owed on credit cards and lines of credit), pin down the funds you have coming in and where that money needs to go. The goal is to understand exactly what money you have, if it’s going to be enough to pay the (holiday) bills, and what you can do to shave excess spending or make more. This is the practice of tracking your net worth (assets minus liabilities; you’ll want this number to grow as you pay down debt and boost savings) and smart budgeting, so as to ensure your income can cover your expenses. Both practices are something I’d recommend doing monthly going forward.
Less materialism and more of you simply showing up as your best self
Your personal value is inherently high and has nothing to do with the gifts you give, what those presents say about you and what this all says about your finances or worth.
Rather than fixate on the spending, gifting, spending more, giving more cycle, focus on your presence day to day, at events, with friends, colleagues and family. Are you dialed into conversations with active listening? Are you helping out where and how you can? Are you practicing gratitude and modelling this to your children? Are you aligning your time and financial resources with your core values?
Intentional spending will feel so good
When you start addressing underlying feelings about regret and guilt, overall awareness drastically increases. It’s an incredible shift from being on overwhelmed autopilot to being in the driver’s seat. When it comes to holiday spending, make sure it’s intentional rather than mindless. Have a plan for what you want to buy, make sure you can afford it by having a pre-set holiday budget in mind. Use up leftover gift cards, store credits and exchange/return for the presents you need in an effort to lower the costs. If you feel yourself slipping again into mindless spending mode, go for a walk.
Avoid long-term regret by scaling down gifts for kids
Get them something they want, something they need, something they can wear and something they can read. And every holiday season, sock away $300 into an investment account for them. Do the same at every birthday. If you did this from newborn to 19, and let it grow earning an eight per cent rate of return in a low-cost ETF, by 65 they could have $1 million.
Research shows that kids well into their teens have very limited recall about the gifts they get. They are far more likely to remember moments with you, special experiences and how they felt during the holidays. So put your wallet and phone away and go have fun with them.
A few weeks ago, I debuted the $27.40 rule. Start saving that amount of money each day, and by this time next year you’ll have $10,000. Incredible, right?
Saving money every day, even if less than $27.40, is a powerful form of self-care. It provides brain benefits similar to exercise, such as walking or working out. While the savings themselves open up opportunities, the act of saving also boosts your financial confidence. As a result, feelings of regret, guilt and shame start to fade, allowing you to focus on a healthier self. Though ‘tis the season of giving to others, giving yourself the gift of financial security might seem counterintuitive, but it could be the best gift of all, for everyone.
This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.
