The holiday season is often painted as a time of joy and togetherness, yet for many, it can also be a challenging period fraught with financial and emotional hurdles. Whether you’re newly navigating widowhood, adjusting to a shift in income, or just trying to maintain a balanced holiday budget, there are steps you can take to ease the burden and truly enjoy this time of year.
A Personal Journey of Widowhood
I’m sharing my story with you to provide context for the strategies I offer. In 2013, at the age of 40, I lost my husband Greg suddenly. My world turned upside down as I found myself grappling with loss while raising three young kids on a limited income. As the holiday season approached just weeks after Greg’s passing, I was overwhelmed by the thought of maintaining our family traditions.
In the first days after our loss, I realized I lacked the energy and the resources to host Thanksgiving as we usually did. It was a timely lesson in knowing when to step back and accept help from family. By Christmas, though, I tried creating new traditions to make the season special for my children, relying on the life insurance benefit that arrived before Christmas to provide what I thought would help ease the sadness.
This experience taught me the importance of financial planning during challenging times and the impact of our spending decisions on long-term family well-being.
Developing a Holiday Spending Plan
Financial empowerment begins with a plan:
– Assess Past Spending: Look at your expenses from the previous holiday seasons to set a realistic budget. For example, in 2016, Americans spent an average of $800 on the holidays, but in some areas, like the East Coast, it’s closer to $2,000.
– Understand Daily and Monthly Expenses: Determine your essential needs versus lifestyle expenses. This will help prioritize spending.
– Check Income Streams: Clarify whether your income is earned, fixed, or post-tax. Make sure your spending doesn’t exceed what you have coming in monthly.
– Track Spending: Use tools like mobile apps or good old pen and paper to track expenses and identify areas where you can save.
– Build a Cash Reserve: Aim to save about six months’ worth of expenses as a safety net, not for holiday spending.
Smart Holiday Shopping Strategies
Sticking to your plan involves:
– Research Before Buying: Understand the market value of items to recognize a good deal when it comes.
– Avoid Last-minute Purchases: Such moves can lead to paying more than you planned.
– Think Twice Before Gifting Extravagantly: Follow a 24-hour rule before making additional gift purchases.
– Explore Alternative Gifts: Homemade items or offering your time can be meaningful and cost-effective gifts.
Handling sensitive financial conversations with Family and Friends
Handling sensitive financial conversations requires:
– Having an Advocate: Identify someone you trust to help communicate your position if needed.
– Setting Boundaries: Be clear with others about topics you’re comfortable discussing, especially if you face financial constraints.
– Timely Communication: Inform family and friends ahead of time about whether you’ll participate in gatherings as usual.
The holidays can be a time of joy and connection, but they can also be a challenge when it comes to finances and navigating changed family dynamics. By creating a thoughtful spending plan and setting realistic expectations, you can honor past traditions while being open to new ones.
Need further financial guidance?
Book a complimentary no obligation call and we can discuss a plan to help you move forward with confidence.
Donna understands first hand that life has many transitions. Having been widowed suddenly at age 40, reinventing her career, and blending her current family, she understands these unique needs and can give you clarity for moving forward!
Donna (Sephton) Kendrick, CFP®, CDFA®
This blog is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought. A diversified portfolio does not assure a profit or protect against loss in a declining market.
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