Welcome to the 9th Smart Money Debate at ReadyForZero! To see the other side of this debate, read Jason’s post: Why You Shouldn’t Go Above Your Monthly Budget for the Holidays. And then let us know which argument was more convincing!
This post was written by Shannon McNay, the Community Outreach and Customer Support Manager at ReadyForZero. You can follow her on Twitter @shannonmcnay.
Oh, the holidays. One of the most fun – and most expensive – times of year.
When it comes to the holidays, it’s unlikely that you’ve saved up year round to buy presents for your loved ones. But you also probably don’t have a budget each month set aside for holiday gifts. So if both of these are true, then what should you do? You’ll have to spend more than your usual budget.
However, you can still make it work without going further into debt. I’m going to explain below how you can spend more than your usual budget for holiday expenses while still keeping intact your long term financial goals and respecting the yearly spending budget you’ve worked so hard to maintain.
I know this will sound crazy coming from a personal finance blogger. I tend to always preach sticking to a budget no matter what. But I believe in flexibility. Without that, no goals can be reached. Whether your goal is financial or personal, if you can’t allow for setbacks or unexpected changes of plan then you’ll never stick to your goals.
So let’s talk about how you can be flexible and buy presents for everyone while making sure your holiday spending doesn’t damage your financial health.
Borrow from Your Budget
Budgets are set up incrementally. You likely have housing expenses, food, entertainment, utilities, phone, and etc. Hopefully you also have a spot for money that goes to savings. Well, just this once a year, maybe you can rejig things a little and borrow from other areas of your budget.
So take a look at your other expenses for the month and see if there’s room to give. Maybe you usually allow yourself $10 a day for lunches out. Well, if you pack your lunches for the whole month of December then you’ll have hundreds of dollars extra to use on presents. Or, maybe you usually put away extra money into your savings account each month. Just for December, you can use that money for presents instead of savings. It’s not ideal but it beats accruing credit card debt and losing money to interest.
You can get creative with your expenses and find all kinds of places for extra money – public transportation to work instead of driving, a few game nights with friends instead of going out, brewing coffee at home instead of running to Starbucks. The point is to sacrifice some of the “optional” expenses in your budget to You might be surprised at all the ways you can borrow from your budget!
Earn Extra Money
Let’s say you haven’t saved for the holidays and you don’t have any room in other areas of your budget to borrow from.
What are your other options? Earn some extra money!
Maybe 11 months out of the year you don’t think it’s worth taking on extra work in order to spend more than usual – but for this one month it might be worthwhile. And the good news? There are tons of retail stores that are willing to hire part-time employees only for the holidays. That way you don’t have to work two jobs forever just to get a bigger holiday budget.
Extra bonus? Find a part-time retail job at a store you’d have shopped at anyway for presents. Not only will you earn extra money, you can use employee discount to save even more on the presents. You might even find yourself paying debt down or putting more money in savings after you’ve finished your holiday shopping!
Use that Bonus for the Good of Others
If you’re really lucky, then your employer will give you a holiday bonus. Now, I know you may have spent the whole year planning what to do with that bonus. It could lead to a vacation, a bigger savings account, some nice new present for yourself.
But if you’re serious to sticking with your financial goals and have no extra money to put towards presents for your loved ones, then this would be a great way to fund those presents. That way you can spend outside of your normal comfort zone just for the holidays without it actually hurting you long term.
The key to all of these options are to be creative and flexible. Maybe you don’t want to borrow from other areas of your budget or work a second job just to make ends meet for one month. And normally I would agree. But if you haven’t set money aside for it leading up to December, then these options will be better than accruing consumer debt!
To see the other side of this debate, read Jason’s post: Why You Shouldn’t Go Above Your Monthly Budget for the Holidays. And then let us know which argument was more convincing!
Image credit: thesupe87