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  • Writer's pictureCynthia Anderson

Holidays on a Variable Income

The holidays are just around the corner and as fun, as they are, we often stress about the expenses that come with the holidays. Living on a variable income typically means it is difficult to save for the holidays throughout the year. Your financial year may have presented itself as a skinny Santa. For many with a variable income, the end of the year bonus makes a fat Santa. If this is your situation, be wise in making decisions and fight the urge to spread your hard-earned cash all over town. Your heart often wants to shower the people you love with gifts. I get that, but having a secure January is a gift too. Often you find yourself using credit cards to purchase gifts. Making the situation worse, upon receipt of the bonus check, you neglect to pay off credit and continue to spend. January comes, and resolving debt is the last thing you want as your New Year’s Resolution; and yet, year after year, here you are again. I want you to avoid this cycle.

In these last few months, I recommend estimating your income and setting aside a certain amount to cover your holiday season spending. Use the remaining portion to cover some of your annual bills, like car insurance or taxes. You will feel great going into the New Year with a bill or two knocked off your list.

Resolve to use cash! Many studies suggest that by using credit, you spend about 20% more than you plan, and you often don't realize it. Then a month later, you look at your credit card bill and are surprised about the amount due. How often has this happened to you? It adds up quickly. Shopping online and using credit? If this is the case, pay off the credit card the same day. Paying it immediately has similar effects as paying with cash. Using cash means no surprise, no credit card bill, and it feels great!

Create a wish list of everything you want to do for the holiday season. Most often people make the mistake of thinking of the total amount they wish to spend, then dividing this amount into a fixed list. This leads to frustration and builds a scarcity mindset; you believe that you cannot have everything you want. I recommend that you make your list backward. With only a ballpark dollar amount in mind, create your wish list, include decorations, crafts, gifts, dinners, and social events on your list. Put a dollar amount for each category and total it all up. This practice builds an abundant mindset. You believe that you have the resources to get what you want. After totaling your list, look at that $ amount. For many people, they are often surprised that everything on their wish list costs less than expected.

Does the total dollar amount make you feel uneasy? What can you trim from each category? Are you crafty? Maybe some homemade gifts will work? The point here is to be creative, make minor tweaks, and be satisfied with your plan.

The last thing to keep in mind is even if it all doesn’t work out perfectly, you will be in a better place come January. You will not regret having a written plan.

When you throw a dart in the dark, what are the chances you will hit the bullseye? Turn the light on, and you will hit it, or at least be closer to the mark. Plan for this holiday season, then enjoy it!

Wishing you a joyous season!


Financial Coach


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