Good morning. I
hope you've had a fabulous week, that you had a chance to put not only thought but action behind your planning and organization for the next four weeks, and
your mindset has been on moving forward in at least one area of your life
around being organized.
My focus for the next two weeks will be on finances and
guess what? Organization and planning
play a key role here too. Now that
Christmas/Hanukkah is a month behind us, are you still paying off your credit
card bill? How much longer will it take
to get everything paid off? Are you
having to forego other wants/needs because of the credit card holiday
debt? If you’re not able to pay the
entire amount, you do realize you are paying more with the credit card late
fees, right? Were you able to purchase
what you had planned, were you able to donate to others, were you able to enjoy
this time of year because of no money worries?
In the past, I would be stressed out about the money I
was spending during the holidays, because it was coming out of our monthly
checking account. What was a complete
turn around and life saver was our decision, about 6 years ago, to make
Christmas a monthly deduction. Setting money aside each month into a savings
account and also getting a credit card used exclusively for Christmas purchases
and donations was the best thing we ever did!!
Any time I purchased something for Christmas whether it was in January
or July or October … I used the designated credit card. When the credit card bill came, I took money
out of the savings account and paid the bill.
Done. No hassles, no stress and
no late fees.
At the beginning of the year, I set up my budget with
the different categories. Because of our
family growing with grandchildren, our desire to give donations to more
nonprofits, and an increase in shipping costs, the total amount of what I spend
has increased over the 6 years. Because
of that increase, we have increased the amount paid into the savings account. Not a big deal to add $10 more on a monthly
basis.
Some of the categories I set up with my Christmas budget
include a maximum dollar amount for our children, their spouse, our
grandchildren (amount changes depending on their age), what we can spend for
each other, and our parents. The items that
can be forgotten, but now in my budget include:
gifts to our mail person, milkman, the newspaper, donation to a charity,
a service organization etc., stamps, Christmas cards, mailing of packages,
mailing of the Christmas breads I send, as well as a misc. category for such
things as purchasing a wreath for the front door, ornaments, etc.
Budgets and keeping to them has usually been a challenge
for me, however, with a new system like this and one I’ll talk more about next
week, has totally changed our lives. I
keep a file labeled “Christmas,” and in it is my budget in a table format. Each budget item is listed on the far left,
the total allocated amount is next, followed by the amount spent column, and
the last column is the final amount left which should either be zero or maybe a
little left over. Once I purchase an
item, the receipt is put into an envelope, and then recorded in the check
register. The check register begins with
the total amount allocated for that year, and each item is then deducted in the
register and on the budget table. I can
easily look at that table to know how much money I have left with that line
item. For my own information, I also
list each person so I can keep track of what it is I have purchased and the
amount. That comes in handy especially
if I buy something throughout the year and put it in a “gift holding” box. I
have a tendency to forget that I did buy something earlier in the year.
This sounds like there is a lot involved and very time
consuming. On the contrary, it’s like
anything else, it is a habit but it is also easy to do along the way. If you try to do this all at one time in the
end, it will not be accurate nor relieve the stress and frustration. Is this the only way? Absolutely not, but hopefully it will give
you a way to begin with a system that works for you.
The key to this type of system is three-fold. First,
create a realistic budget. Go back over
your expenses this past year and see where you spent money. These then will help you create the
categories for your budget line item.
Once you have everything including something maybe you would like to
have been able to do but couldn't afford at the time, you will now have a total
you will spend. Divide that total by 12
months (11 months now), and that will be your monthly deduction. There may need to be some adjustment in your necessities
budget, but it’s easier to do that now and MUCH less “painful.” Second, set up a savings account only
for Christmas/Hanukkah. Make a monthly
deposit into that savings account. The
monthly amount will depend on your budget determined by your needs. Finally,
apply for a credit card (not a debit card) which will ONLY be used when you purchase items for the holidays. Having a separate savings account and credit
card keeps things separated and easier to track versus having money
co-mingled. When the credit card bill arrives, all you now
need to do is transfer funds and pay the bill on time – no late fees!!
This system allows me freedom to purchase items
throughout the year, to have a handle daily (if I want) on how much I have left
to spend on a particular person, line item etc., and it gives me a peace of
mind that the money is there. After the
holidays, the last thing I do is to see the totals spent in each category and
set up a budget for the next year. I had
to increase my shipping line item as that amount is increasing for 2015, a few
other line items were dropped as they were no longer needed etc. I found, in the end, we need to increase our
monthly contribution to the savings account by $10. Doesn’t make a difference on a monthly basis
but could make a big difference at the last minute and the total is $120.
I encourage you to take time this week to look at how
you are allocating money for the holidays.
What is your system, where is your money being spent, how did you do
this year, and the key…are you debt free after the holidays or are you paying
off credit cards which now include late fees? January 31st is Saturday.
February could be the beginning of your new system to prepare for the
holidays!
I wish you peace of mind with this area of your
finances, let me know what you think of these suggestions, and I would love to
hear what other ideas you have for what you do.
No comments:
Post a Comment