Does the holiday season look like an impossible balancing act?
On the one hand, choices seem to be more abundant than ever. There is a deep desire to pick the perfect gift for everyone, and while we know there really isn’t a correlation between the price of a present and how well it will be received, we don’t want to come across as cheap.
On the other hand, your funds are limited and no matter the size of your wallet, going overboard is an ever-present possibility. You can even feel that there is a flaw somewhere when deciding how to make a budget.
Well, you are not alone. According to the World Economic Forum, two-fifths of Europeans feel pressured to spend during this time. Even worse, one in 10 people resort to debt to make it through the season - when they really know they should get rid of it. Add that to the fact that for every 7 Europeans, 1 gets gifts they don’t want, it seems a change in perspective is in order.
Here are 3 things you can keep in mind for your Christmas finances so (even if only now is the moment you decide to start investing):
#1 - Evaluation
Every financial decision should come from a place of clarity. From budget creation to getting more money to build wealth, there isn’t much point in getting a target if you don’t know where you stand.
It’s necessary to have an end goal, but without knowing where you start from there is know way to make an effective plan to get there.
So it’s time to take a look at your current situation. Ideally you would already have a monthly budget to guide you. If you don’t, consider this the first step.
Quite simply, look at money coming in and money going out. Doing it this month, however, brings an added challenge: the increased spending that comes with gift-giving.
You can switch around some entries, but keep in mind that some compromise may be necessary. And if you need something to take comfort in, all you have to do is remember that across many European countries, post-lockdown sales projections have fallen, so you are not the only one wanting to spend less.
#2 - Inspiration
This is the fun part of the process.
By looking up close at where you stand, you should know by now how much you are able to spend.
If it looks a bit too little, you have two options: either reallocate funds you planned on spending (knowing that you are choosing one over the other), or you can choose to invest some more time and work to maximize impact.
Either way, the recipient of the gift is always your starting point. The more thought and customization you put into it, the more special it is going to be for them.
Going more DIY will enable you to get something that no one else could give.
Remember - your goal is to show appreciation, not spending as much as possible.
#3 - Transformation
The last point is about mentality. It’s about going from a measure of amount spent to a measure of thoughtfulness.
Money does not keep score when it comes to gift-giving. Money is a tool and an enabler. By respecting your limits, you may even add an extra layer of value if you commit to making your presents special.
Temptation may come up, of course, but you can always choose to look at your budget not as a constraint but as something that gives you permission not to spend. And there are always some steps to go through from time to time to keep it updated.
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