Think Long Term For The Holidays

November 11, 2014

So the weather is cooling down and immediately we start thinking about all of the yummy holiday food and spending time with our loved ones. After we start basking in the glow of chocolate chip cookies and family, it slowly starts to sink in that this time of the year is expensive. Between traveling, Thanksgiving Day meals, and presents, you and your wallet are exhausted by New Year’s. So what is a gift-giving person to do?

First, taking a bite out of your 401k plan to cover holiday expenses in the short term seems reasonable, but in the long term, the consequences can hurt your finances. If you leave your job, you may have to pay taxes on any unpaid loan amount. Also, you will be paying for the holiday with payroll deductions since you have to pay the loan back. Do you really want a reminder of your holiday spending to hit you with every paycheck for up to 5 years?

Second, come up with a holiday shopping strategy. Holiday shopping for me is a yearlong event. I normally start shopping the day after Easter since quite a few toys go on sale. These toys are gifts for unexpected birthday invites and Christmas gifts for young children. Mother’s Day sales are also great for gifts for women and Father’s Day for men. If you have daughters who love to dress up, head out the day after Halloween to stock up on costumes so they can be properly dressed as they sing “Let it Go” for the millionth time. Dollar stores are great for stocking stuffers for kids, holiday decorating items, wrapping paper and gift bags. I get these items as soon as I see them in October because they go fast. By Thanksgiving, I am pretty much done with Christmas shopping.

Of course, there is the mother of all shopping days, Black Friday, the day after Thanksgiving. I hate it, hate crowds, and won’t do it. But, for those who are willing to rise to the challenge, the deals are phenomenal. I then wait for the day after Christmas and New Year’s sales and stock up on gifts for the following year and birthdays presents.

They key is thinking long term. You do not want the warm feeling of the holidays to simmer into regret and dismay come Jan 1. I hope these tips will help you have the holidays of your dreams instead of waking up to a financial nightmare that will haunt you into retirement.