Excited about spending the holidays with your family and friends? Get your finance in tip top shape for it!

The holidays are almost here with school holidays, Christmas, and the New Year just around the corner. You are surely planning on what to spend on and where to travel to but are struggling to plan your finances around it.

The list of steps below will help and guide you in planning your finances around it and applies to all the other holidays. Sit back, relax, and find out more below what are the necessary steps below!

Step #1: Take Stock of Your Savings and Investments

The first step in getting ready for the holidays is to take stock of your current financial position. This means evaluating how much cash and savings that you have at the moment, and also the various investments you have tucked away. You will be amazed how much you actually have when you sit down and take a good look.

Gather all your bank accounts even the ones which you created way when you were a young adult. For investments, contact a customer service representative in any of the banks that you have created an account with and ask what are all the existing investments you have with them. Once you have gathered all the information, put them in a spreadsheet and keep copies of your investment statements in the same electronic file as your spreadsheet.

Like Sun Tzu once said, to know yourself and your enemy, you need not fear the results of a hundred battle. Know how much you have so that you can plan ahead for your holidays!

Step #2: Repay Your Borrowings

After taking stock of your savings and investments, focus on repaying your borrowings now. Living debt-free is hard but living knowing you have no outstanding debt to pay at the moment is the next best thing. You certainly don’t want to be getting calls from the bank about an outstanding payment during your holidays.

If possible, you can try to set up an auto-pay function for your borrowings and debt. This enables you to be sure that you are always on time to pay whatever that is outstanding. This step is crucial as it helps you to determine how much you have left over after paying down debt, and ultimately determines how much you can spend during the holidays worry-free.

If you are having cashflow problems in that you do not have the money now, you can rely on your credit cards to make purchases during the holiday first. However, you should not rely on them as the main source of funds as you might lose your discipline managing your finances during the holidays by overspending.

Step #3: Prepare Your Shopping List

Shopping is always top on everyone’s mind no matter the holidays season. With our big melting pot of ethnicities, every festival is a celebration of color and tradition, in particular when we get dressed in our newest and finest outfits to celebrate.

The next thing to have on your shopping list are decorative items. Time to pretty up your homes with lovely holiday-centric decorations or even new furnishings to get into the festive spirit.

Lastly, don’t miss out on the presents and gifts. No matter the celebration, there is always a spirit of giving between family and friends. You do not need to buy expensive items, but they do add up to your expenses. Think about what you want to include in your shopping list and look to buy things in bulk to get a better deal.

Step #4: Prepare for Additional Expenses Related to Eating Out

This deserves a step on its own as eating out has become more of a norm during the holiday season. While you still cook at home for the first meal of the holiday season and celebrations, it is becoming more common especially for people living in urban areas to eat out instead. Cooking at home requires a lot of effort and time, and is not just a one day affair.

After your first meal with your immediate family, you wont want to be devoting as much resources and effort to cooking at home again for relatives and friends. Instead, more and more people are opting to just eat at restaurants instead to save on time and effort. Food isn’t exactly cheap when you eat out, and you need to spend on petrol and parking. When you do it multiple times during throughout the holiday season, all these expenses are going to add up significantly.

If you are not careful about this, you might just find yourself overspending and facing some cashflow issues. Plan for the places that you want to eat out at beforehand. Scout for the prices of the restaurants that you are planning to go and most importantly, eat in moderation. Don’t be spending on RM300 steaks or seafood.

Step #5: Prepare for Travel Expenses

While the pandemic is still around, many places around the world and locally are welcoming visitors and tourists already. With flight routes opening up and travel restrictions easing, you may be choosing to travel during the coming holidays with your family and friends to create new memories.

You need to prepare for the usual vacation expenses such as luggage bags, flight tickets, and accommodation. Pay close attention to flight tickets as flight frequencies and routes are still lacking, so you might be paying more considering the shortages. You can still reuse some of your old luggage bags and accommodation companies are actually offering cheaper prices to attract more people to travel.

However, there are some additional things that you would have to spend on that doesn’t relate to your regular expenses. You would have to spend on test kits for Covid-19 that are expensive considering that you would have to regularly test yourself throughout the vacation. Face masks, gloves and protective shields would also be a big part of your expenses. After all, this is the new normal and reality for vacations for you.

Step #6: Start Planning for Your Finances After the Holidays

Take a bigger picture of your finances. Most of the time, you would worry more whether you have enough to spend for the holidays but the more important question is whether you have enough after the holidays. This will give you a bigger and longer term view of how you plan your finances for the holiday.

Pay close attention to your required expenses such as food and rent after the holidays as you would need to at least be able to pay for them before the next paycheck. Your current loan interest for the car and house would also need to be paid in full.

Start early and plan ahead. Engage a licensed financial planner to see what expenses you need to incur during and after the holiday seasons to ensure that you are still on track in your financial journey.

Conclusion

Plan your finances now before the holidays so that you can enjoy them without much worry and stress. Take these steps in order and ensure that your financial journey is still intact.

 

What are your exciting plans for the holidays? Let us know in the comments below!

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