As the long (long) year of 2020 draws to a close, many of us could use an opportunity to reduce stress. This December, as different as it may seem, presents an occasion to try out some financially healthier ways to approach the holiday season.
Identify your priorities
Think back to this time last year. What were your priorities? Was it to scour the mall to find the perfect designer sweater for your spouse? Ensure that the latest games were underneath the tree for your kids? Spend the holidays abroad?
Whether you have been laid off, had your hours cut back, or simply experienced the material simplicity of spending more time at home , 2020 has impacted many people’s financial priorities. For many Canadians, “needs” like short-term cash flowCash flow The sums of cash a business gets in and spends out during a set period of time.+ read full definition and saving for retirement have become more important than immediate “wants.” Aligning your spending with your priorities will minimize buyer’s regret.
Perhaps this is the year to scale back on gifts and focus your dollars on experiences. After all, most people can identify with the often-fleeting joy associated with material gifts. Try low-cost options, like going tobogganing with your kids, or spending an evening working on a puzzle featuring a gorgeous scene of palm trees and surf.
For those close to us but not in our quarantine “bubble,” such as aging parents, you could prepare a nice meal and leave it on their front steps.
Reducing your spending will make you feel more in control. And minimizing clutter created by more “stuff” reduces everybody’s stress.
Stick to a budget
Many of us make budgets. Not all of us commit to them.
This year, challenge yourself to create a non-negotiable holiday budgetBudget A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.+ read full definition. Minimize the stress of shopping and limit the number and cost of gifts.
Sleep on big purchases. If you are eying that fancy at-home workout system, make sure it’s adding value – not stress – to your life.
Studies show that difficulty paying off debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition is strongly linked to anxiety and depression. When spending money this season, keep in mind the emotional ramifications of a January with too many bills to pay – and again, stick to your budget.
Once you have set your budget and know your priorities, determine if there is a way to focus your spending on small, ideally local, businesses. Sure, it’s easy to shop online with the big-box stores, but small businesses have been hit hard this year with COVID-19 restrictions. Consumers can help their favourite ones survive by choosing to shop there this holiday season. Even if there are limitations on in-person retail shopping in your area, many small businesses established an online presence this year.
Make life cozy
This has been a tough year. Commit to making this holiday season comfortable with minimal cost. Play your favourite holiday music. Read a good book from the library. String some white lights. Bake gingerbread and enjoy the smell wafting through the house.
And feel confident that, come 2021, you’ll have no financial regrets – and hopefully a bit more money in the bank.