With the holidays already upon us and more coming up soon, you may be feeling the financial strain of the season. Yes, the holidays are an opportunity for spending quality time with family and friends, but we cannot deny that spending often comes in more forms than one. If you are feeling stressed out by the financial burden of this otherwise joyous time of year, allow Morris Financial Concepts to provide a few of our favorite tips for planning your finances for the holiday season.

Start Making a List

And definitely check it twice. Before you break down the numbers, make a list of every expense you can possibly imagine incurring. Don’t only think about gifts; think about everything. Here is a list of potential expenses, but do not take it to be exhaustive:

• Gifts for friends and family, including shipping costs
• Holiday parties
  • Work events
  • Decorations, food, clothing
• Charitable donations
• Holiday cards, plus their envelopes and postage
• Wrapping paper, ribbon, tags, and other gift accoutrements
• Miscellaneous holiday activities, like pictures with Santa or family traditions
• Travel expenses
  • If flying, consider the cost of flight tickets, baggage fees, and airport parking/transportation
  • If driving, add in gas, tolls, service visits

Now Break Down the Numbers

Now that you have your list of people on your gift list, your holiday card mailing list, and all of your other expense categories, you can start adding in the numbers. Do some research on things like flights and give your best estimate for the smaller things like gift wrap or cookies for your work party.

When you run through everything the first time, you may be taken aback by the numbers. Do not panic! Budgets are living documents, made to be adapted as you go along.

If you find that your holiday expense total is something you simply do not have in your budget, start looking at places you can reduce spending or increase income. Try not to rely on the option of using credit and paying it off later; no one wants to go into the new year with a couple grand in debt from last month’s festivities.

Making the Numbers Balance

You have your hypothetical expenses and you know how much you can realistically afford to spend. If your allotted cash does not cover the hypothetical expenses, now is the time to get creative.

It can be helpful to prioritize your expenses. You know you want to spend a certain amount on the children in the family, but clothing for yourself for an upcoming New Year’s Eve party is not essential. Rank expense categories in order of importance and see where you can cut back if necessary.

The first time around, you may have been too generous in your estimates of some expenses. If you plan ahead for major sales or realize you can make some gifts instead of buying them, you may come in significantly under your first budget. Go over your budget with a critical eye and locate the areas that may have been inflated.

Instead of getting a small gift for all of your friends or family members, think about money-saving alternatives. You could suggest doing Secret Santa, a potluck, or volunteering together. At the very least, you could propose a spending cap or send out an anonymous poll to see what everyone is comfortable spending on the holiday occasion.

To help you finagle the numbers even more, you could try boosting your income as well. This could be an opportune time to sell some of those items that have been collecting dust in your closet or get back into that side hustle you put on the backburner. Many companies in retail and fulfillment are also in need of seasonal workers, so if you have the extra time, you could spend it building up your holiday reserves.

Monitor Your Progress and Prepare for Next Year

The key to making a budget work is to use it. Track all of your expenses and monitor where your spending actually is versus where you expected it to be. If you see that you’re spending more than you anticipated, re-evaluate your budget and/or curb your spending. You may find it useful to set up a separate savings account for holiday expenses only so that you can see how much you have left to spend.

Planning your finances for the holiday season can be stressful, especially if you start the process late in the year. Having a plan is always better than not having one at all–even if you started late in the game–but having a plan early can do wonders for your peace of mind. Start planning for next year as early as you can so that the next time the season of giving rolls around, you can focus on enjoying time with those you love the most. If you would like assistance in planning out your finances for the holidays or any other time of the year, we have the best financial advisors in Charleston. Contact Morris Financial Concepts.

**The opinions expressed herein are those of Morris Financial Concepts, Inc. (“MFC”) and are subject to change without notice. This material is for informational purposes only and should not be considered investment advice. MFC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about MFC including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request. MFC-19-24**