Financial Resource Center

Money Management

Create a Spending Plan for a Special Holiday

by Judy Dahl / November 7th, 2011

Whether you celebrate Christmas, Hanukkah, Kwanzaa, or the solstice, the holiday season can be stressful—with financial stress often playing a large role. People feel pressure to give gifts, entertain, and maybe travel, but also to keep costs down. You can try to do it all and bust your budget—which can come back to bite you later. Or, you can hunt bargains relentlessly, which can be exhausting and sap the holiday of its sparkle. But is everything really equally important? Why not figure out what makes the holidays special for you and your family and allocate most of your spending to those things? Maybe there are other, less important things you can scale back or skip. For instance, if you love hosting a lavish holiday dinner but are ho-hum about festive holiday clothing, don't buy that new outfit. Budget more for your dinner instead. The key is to set priorities and identify the important things.

Set priorities

The American Dream tells us we can have it all, but that's not true for many families, especially in today's economy. "We have to negotiate and learn how to get what's most important and be willing to leave the less important behind," says Kathleen Gurney, Ph.D., Sarasota, Fla., CEO of Financial Psychology Corp. and author of "Your Money Personality: What It Is and How You Can Profit from It." "We need to do that personal inventory and learn what we really need and value most," Gurney continues. "If we live with others, we've hopefully learned how to set priorities and then plan to realize them. In the process, we learn how to communicate and negotiate for a win-win."
Figure out what makes the holidays special for you and allocate most of your spending to those things.
We probably can't have it all. "But we can have what matters most, if we know what that looks like, and what it will take to pull it through for ourselves and those we love," Gurney says. "We set ourselves up when we have too many priorities—they lose their power and joyfulness when accomplished, and just set us up for disappointment when they remain unfulfilled." To set priorities for the season, "Do some soul-searching of holidays past and [future] that would be enriching," she suggests. "Spend some time thinking about what this holiday would look like if it made you and meaningful others feel joyful." As you mull over ideas, consider having those who participate in your holiday write down what they think would be special. Items that top the most lists are likely your family's highest priorities. "If there's enough commonality in the priorities, you could create a group list so all could participate in realizing as many of the top priorities as possible in the time you have together," says Gurney. "Maybe all could share one special memory of a family ritual they still find meaningful," she adds. "If none come to mind, create some for this holiday as a special activity you can all share and continue over the years."
People who don't need more material items often appreciate a charitable contribution in their names, or the gift of your time.


Once you've set your priorities, determine how you'll work together to plan and carry out your holiday activities. Who is responsible for which ones? How will you pay for them? Coordinate dates and times so everyone can mark their calendars. Then each of you can create a spending plan. Take the time to think realistically about your expenses. Otherwise, unexpected costs can add up. If you're going to travel and stay in a hotel, don't forget about fees and room taxes. For meals or events you'll host, make a list before going to the store to avoid impulse buys. And when it comes to shopping, don't forget about things like meals out. A list will help here, too, so you don't overspend or forget anyone and find yourself making last-minute purchases. "Most people I've spoken to said that they shopped on 'Black Friday' and on 'Cyber-Monday' without a holiday spending budget," Gurney reflects. "In retrospect, they admitted [making a list] would have been a good idea. It may have prevented them from spending more than they wanted and from buying tempting items that weren't on their lists." And remember, the holidays aren't just about presents. "With each holiday, we anticipate and search for an emotional replay of the special sentiments they evoke," says Gurney. "We can be fooled in trying to bootleg these feelings through buying gifts, but they so often fall short of giving us or others what we all seek most: feeling connected and a special part of our family and friends."
Think about what this holiday would look like if it made you and others feel joyful.


A thoughtful gift often can foster that connection better than a lavish one can. "My brother and I have exchanged expensive gifts in the past," says Rob Severson, a financing coach in Deep Haven, Minn., and author of "Connecting Peace, Purpose, and Prosperity: A Survival Guide and Memoir." "But last year I gave him a picture of Tower Falls at Yellowstone Park that hung in our house when we were kids. It's his favorite place and he really appreciated it. It's from the heart. It's special to him and it didn't cost anything." People who don't need more material items often appreciate a charitable contribution made in their names, or the gift of your time. "Give to a fund they believe in," Severson recommends. "Or offer to help with a project around the house, or take them to lunch, or just go for a walk together." The holidays tend to bring people together. "So if you have a bad relationship, it's a great gift to mend it and make amends," says Severson. "You'll be a lot happier if you don't wait and it will probably mean a lot more than a box of candy." The holidays are about being focused on others, which actually makes it easier to budget, he notes. "The less self-centered you are, the less likely you are to have financial issues from spending every nickel on yourself." So if you set priorities for holiday activities and purchases, plan for the top-priority items, follow a spending plan you can afford, and focus on others and what makes them happy, you're well on the way to a happy, meaningful holiday season.
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