'Tis the season, to pepper spray other shoppers and spend too much money. And in the words of my friend John, "nothing says 'Good Will Towards Man' than that burning sensation to the eyes". I, however, prefer to make a tax deductible, contribution to my favorite organization.
This year for the holidays I am donating to The Leukemia & Lymphoma Society and The Rutgers University - Debbie Lyle Mojta Scholarship Fund. If you are making a donation to the Debbie Lyle Mojta Scholarship Fund, please make sure to type in the name of the fund you are supporting on the linked webpage.
Leukemia & Lymphoma Society - http://pages.teamintraining.org/ky/pfchangs12/GoJulieG.
Debbie Lyle Mojta Scholarship Fund http://support.rutgers.edu/s/896/Foundation/Givestart.aspx.
Ahh how easy it is to overspend during the holidays - perhaps fueled by the influence of your spiked soy eggnog, whining children or the reality disconnect created by using plastic instead of cash. But there are ways to avoid that January "financial hangover" and the year long effect it causes.
Making a list and checking it twice can help!
The first step toward taking control of your finances is to assess how much money you bring in and how much money you spend. Start by writing down your income from all sources and then list your "fixed" expenses. Fixed expenses are those that are the same from month to month, like your mortgage or rent, car payments, and insurance premiums. Next, list the expenses that vary, but are necessary, such as food and utilities. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, determine where you are overspending and prioritize. The goal is to make sure your "needs" are covered before your "wants".
Now that you know how much you have, make a list of who you are buying presents for and jot down ideas of what you want to get them. This can keep you from impulse buying.
Impulse buying is an unplanned decision to buy something, that you make right before you buy it. It is said the emotional effect of impulse buying disrupts the normal decision making pattern in your brain; logical actions are replaced with an irrational moment of self gratification. Impulse items appeal to your emotional side and are not considered necessary in a consumers' life.
In addition to not planning another source of overspending during the holidays is "gift guilt". Gift guilt comes in several sizes including "homemade", "surprise" and "equalizing". "Homemade" gift guilt is when we believe that homemade gifts are unworthy. Anyone who believes that has clearly never tasted my homemade, farm fresh marinara sauce or pistachio, cranberry biscotti! "Surprise" is when someone gives you an unexpected gift and so at the last minute you run out to the store and....yes - impulse buy. "Equalizing" is when you try and keep up cost-wise with someone else who either makes more money than you do or has totally blown their budget!
Holiday joy? Guilt? Victim of marketing? Medication worn off? Whatever the case may be, making a plan and doing your best to stick to it can help you avoid the long term effect of overbuying during the holiday season. Come January when the bills arrive, money that you may have been planning to use to fund your ROTH IRA now gets allocated to pay down credit cards. And just about when you clear that up, guess what - it's holiday season all over again.
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Disclaimer: Tax advice contained herein was not written to be used and cannot be used to avoid payment of taxes or to avoid penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. All information provided is for illustrative purposes only. You should contact an accountant, tax preparer or tax attorney for advice or information specific to your situation. This information is not to be used as a directive.