Impulsive overspending during the holiday season has reached a level where it’s almost normal. From pressure to buy bigger presents each year to traveling further away then, of course, bigger parties with a wider selection of beer.
It then comes as no surprise that stress and financial problems go together with the holiday season.
The refreshing news?
We’ve collected a selection of actionable financial tips that will change all that and help you actually enjoy the holiday break.
Before the commotion starts. You’re better off having a plan in place before the urge to spend recklessly catches up to you. January will thank you for doing so.
Financial Assessment
A close look at the state of your trade business currently will help you to decipher which next step to take.
For example, what kind of business are you running? Does your business activity peak at this time of the year? The wiser plan would be to build your holidays around any emergency work that might pop up unexpectedly.
Give your mind a mental break by putting boundaries on the amount that you can safely spend. Creating a budget and sticking to it ensures that you still spend, yes, but make it to the point of enjoying your holiday. Keep in mind that the money you can realistically spend isn’t in no way part of the funds you set aside for bills. Money for gifts and beer can be money left over after paying for utilities OR money you’d have naturally used to buy your coffee or lunch on a regular workday. This only applies if you’re using cash and not letting it flow into your rent or transportation funds. The important thing is, to be honest about what you can spend instead of stifling other important items that need money such as a jacket and scarf for the upcoming autumn season. Set up limits to ensure you can buy gifts and keep your business and life in order.
Since we’re still on the topic of spending habits, SAVE, SAVE, SAVE and do it right now. Like the example given in the tip above, swap your routine coffee for saved cash or bring homemade lunch instead of buying it. Keep in mind that loans and credit cards are the enemies when it comes to financing your holiday break arrangements. Opening a savings account solely for holiday funds is a brilliant idea.
We completely advocate for the profit first method before anything else. This is known to build your trade business economically then creating long term success. You’ll need to first account for your profit, followed by your taxes, pay yourself, and then the remaining amount is what your trade business can spend on everything else.
It might seem cliché but lists work. Make a list of all the items you intend on buying in order of priority. Buying early helps you to take advantage of sales plus prices of commodities are typically lower before the holiday season sets in. If your finances allow it, try to purchase items you need for when you reopen at work. You’ll likely get a 10% or maybe even 50% discount on tools if you use coupon codes. Don’t give yourself pressure to do this however if no sales are going on. Potentially after Christmas is an opportune time to find good
deals for tools and other equipment.
Don’t lose this list after you’re done. You’ll need to refer to it later.
Back to the list. Again. Add the areas in which you need to spend money. Those gifts, special dinners, travels, the whole lot.
If you can find a worksheet to use that would be great, but if not, we’ve created an editable one right here that you can download for free.
The resource will help you single out plans and decide on which items are priorities to spend money on. Remember to stay in touch with the reality of your situation and business. It would be best to refrain from spending money that you can’t save between now and the holidays.
Chances are your professional peers, friends and family have problems overspending during the holiday season too. Take the time to improvise. For example, in the office, instead of throwing a lavish party for your team and buying everyone gifts, make everyone buy each other gifts. A classic “Secret Santa” type of situation. It can be turned into a tradition, plus the gifts will be more personalized. This applies to the home scenario. If not choosing to volunteer somewhere, do a bring and share instead of carrying all the expenses of a party by yourself.
Before things get crazy, start saving up for your holiday plans right now. You’ll save more, have better cash flow and a healthier state of mind free from financial stress. Planning and scheduling will make a HUGE difference and shield you from buyer’s remorse.
The accountants at Tradies are always available in case you need further assistance. Happy Holidays!