Five Holiday Spending Tips from a Couple of Financial Planners

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Financial Planning is all about planning for the holiday you really want.   And, with a few simple strategies you can bypass the overspending and avoid the guilt that often follows the holiday season.

Here are five tips from planners Carolyn Ozcan and Beth Remick, CFP® to help you enjoy a guilt-free, abundant holiday season.

Tip #1:  Figure out how much you really spend over the holidays.  Gifts are just the tip of the iceberg when it comes to holiday spending.  A few holiday expenses most people forget are:  holiday-related travel, cards and postage, decorations and tree expenses, wine and spirits, entertaining and upgraded meals, new clothes for holiday parties , formal photo shoots, and holiday related home improvements.  Put a real number on your holiday expenses and then use the rest of these tips to manage the expense.  If you can’t afford  your list this year, calmly and intentionally think about what is most important and what is least important and start cutting or substituting!

Tip #2: Try to spread the expense over time (ie. 3 credit card cycles)   Pick up your holiday outfit as part of your fall shopping trip or better yet in January/February on sale for the following year!  Start stockpiling liquor and wine in October so you are ready for stress free entertaining come November.  Buy the cards and wrapping paper you need half price in January for next year!

Tip #4:  Do your gift shopping over the internet..  Sure online shopping is convenient, but it can also save you big bucks!  Even if I don’t get the very best bargain on every item, I find that I spend much less overall because I’m not tempted to buy stuff for myself.  The less time I spend in a mall or a store the less I spend.  It’s a fact.  Shopping begets shopping.

Tip #4:  Focus on what’s important.  Focus your spending on what is most important to you.  If you want a big party then cut back on the gifts or travel.  Wear something in your closet so you can splurge on new curtains that your guests will see over the holiday.  It’s your holiday, figure out how to enjoy it!

Tip #5:  Review Actual Expenses.  At the end of the holiday season, get that list of expenses out and update it with actual expenses and start a savings account for next year.  Divide the total by 10 and save 1/10th of the amount each month from January through October and you will truly have a worry free holiday next year!

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Open Enrollment Season: A Few Things to Consider

Posted in Open Enrollment on by .

Open enrollment season is a great time to review your finances and make wise choices based upon your own personal financial journey.

Here are a few of thoughts on open enrollment:

High Deductible Health Insurance Options:   If you elect a High Deductible Health Insurance Plan with a Health Savings Account, be prepared to manage your health care dollars. Think of your Health Saving Account as a personal savings account except the funds are used to cover health care costs. You control how much money to set aside for health care costs and manage how these funds will be spent.

Flexible Spending Accounts:  If you elect to participate in a Flexible Spending Account, check with your employer to see if they have adopted the amended “Use it or Lose it” rule. Under this amendment, employers have the option of allowing participants to carry over up to $500 of unused funds at the end of the plan year to be used any time during the following year.  Also, the carryover does not prevent you from deferring the maximum funds to your FSA in the following year. This program is an alternative to the grace period that some companies offer of up to two and a half months.   Many employers are adopting the carryover immediately; so up to $500 in leftover funds from the 2013 plan year can rollover to 2014.

Long Term Disability Insurance:   If you are considering disability coverage, think about where you are on the spending spectrum. Do you have high discretionary/low fixed costs and could easily adjust to standard disability coverage equal to 66.7% of your income? Or do you have high fixed costs/low discretionary costs and would be strapped under standard disability coverage? It may be worthwhile to investigate whether your employer allows you to buy up your disability coverage or look at buying additional coverage outside of your employer’s plan.

Life Insurance Beneficiaries:  Whether you have basic life insurance paid for by your employer or elect to go beyond this amount, make sure that you name beneficiaries to your policy. You can usually designate a primary and contingent beneficiary. A primary beneficiary is entitled to the proceeds of the policy upon your death.  A contingent (or secondary) beneficiary is entitled to the policy proceeds if the primary beneficiary has predeceased you.

Take the time to make the selections that best protect you and your family!

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