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Smart Holiday Spending

By George Grombacher

President of Financial Consulting Professionals, the Founder and Chief Community Officer of Money Alignment Academy, and the host of the popular Money Savage podcast

“Bah! Humbug!”


I won’t use Scrooge’s famous catchphrase and this isn’t a blog post discouraging holiday spending, so please continue reading.


Instead, I’d like to better prepare you to truly enjoy your holiday season using the three characters Scrooge encountered during Dickens’ A Christmas Carol.


Some of my fondest memories are of Christmas as a kid. When I look back on that time, I can’t help but think about how this holiday season may not be quite as bright because of the pandemic. I consider how my kids (four and one) may not get the same experiences I had when I was their age. And while this may very well be true, I won’t let my Ghost of Christmas Past cause me to emotionally react to my Ghost of Christmas Present, or vice versa.


What I mean is that it’s a natural and very human desire to want to compensate for the difference in this year’s holiday celebration by buying more or bigger presents. Rather, I’m working to keep in mind the Ghost of Christmas Yet to Come, and that we’ll be back to normal sooner than later.


Maybe you’re looking at everything rationally and realizing you have a lot of extra money because you're not traveling or exchanging gifts with as many people. If that’s the case, then by all means - splurge on something! Remember, I told you I wasn’t going to “Bah! Humbug!” all over your holidays.


Similarly, I’m not the guy to tell you not to buy coffee because it’ll prevent you from becoming a millionaire. Quite the opposite.


What I focus on is figuring out what really lights you up and doing more of it. So, if that’s coffee, traveling, investing, or eating out, go for it. This is one of the more compelling reasons for keeping a budget: so you know how you’re doing with your spending and can allocate the right amount to what makes you happy.


I’ll only spend a couple of lines on this, so bear with me. You must know your facts: your cash flow and budget. Without knowing how much money you have coming in and out, how will you ever know if you’re doing the right things or are on track to reach your goals and objectives? Imagine if Amazon didn’t track cash flow or operate on a budget. Why are you any different? Knowing your facts allows you to double down on things you truly enjoy, which is really what I wanted to talk with you about.

As I’m writing this, I realize it’s probably too late to stop you from making big Holiday purchases like a Lexus with a big red bow on it, but I can encourage you to be more mindful about how you’re spending smaller amounts of money - say $100 or less. Because between now and the end of the year, you’re going to be faced with a lot of those decisions.


I don’t have a naughty or nice list of things you should be spending money on, and I’m not telling you to leave your emotions out of your decision making. For the next several weeks, when you’re thinking about spending money on something, take a moment and ask yourself, “Is this a heck yeah?” If yes, do it. If it’s a “meh,” then don’t do it.


The more we can focus on what really brings us joy versus the things we’re simply in the habit of spending money on, the more we can prioritize the good things and cut out the “meh” things. For example, I used to be in the habit of eating breakfast and lunch out every workday. It wasn’t because I loved doing it, but it was simply because that’s what was done where I worked at the time. Looking back, I could have saved thousands of dollars every year by simply eating breakfast at home and bringing lunch to work, even just a few times per week. The flip side, though, is that if you absolutely love eating out, then figure out a way to do it for every meal or even a few per week. It may not be possible, but why not work to figure it out.


The next level of mastering this concept is to focus on how we spend small increments of time throughout our day, and recognizing what we truly enjoy doing. Then, trying to eliminate what we don’t enjoy doing. But, that’s a conversation for another day.


Remember: almost half the world - over three billion people - live on less than $2.50 a day. Whenever I need a dose of perspective, I think about how my life would look if that were me. As you head into the holiday season, count your blessings and enjoy your loved ones.


Happy Holidays!





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