A recent survey from my friends at Franklin Covey found that 61 percent of people say they always spend too much during the holidays. That’s a problem, particularly when the excess is floated by credit cards.
So how do you keep from kicking off the new year in a load of debt? To start, you need to know what, exactly, your budget is. I’ve developed a handy calculator that can help you do the math, so go ahead and run your numbers now.
You’ll see that I’m suggesting you spend no more than 1.5% of your take-home pay on the holidays. Why? Because in my experience, that’s an amount most people can pay off by February — if not sooner. You’ll see in the calculator’s results that putting the holidays on a credit card and then going the minimum payment route to erase them can have you paying for this holiday season through 2013 (or beyond)!
Once you have your magic figure, make a list of the people you typically purchase gifts for, and how much you can spend on each person, using your overall budget as a guide. (Be sure the amount you settle on for each gift is inclusive of shipping charges, taxes, and other incidentals.) Not only will organizing your thoughts into a list keep you from forgetting anyone, it’ll also help fight off distractions, like the cashmere sweater your mom would love but, sadly, you can’t afford. And remember that if you seem short on cash, you can always turn to inexpensive or even free gifts – offer to baby-sit for your best friend’s kids — joint gifts for couples or families or (a personal favorite) Secret Santas.
One final, favorite tip: If you’re like me, you might have a few gift cards you’ve accumulated over the last few birthdays or holidays. There’s nothing wrong with using those for your holiday shopping – it’s essentially free money to add to your budget, and no one will be the wiser.
QUESTION: “I’m a single, pre-kindergarten teacher that loves her job but I have trouble making ends meet, especially during the summer months. I get paid twice a month—roughly $1,200 each paycheck. My take home pay per year is about $24,000. What can I do during the school year so I can live comfortably during the summer and not worry about my finances?”
-Jennifer, New York
ANSWER: Summers off, lots of vacation time, a nice benefits package…being a teacher definitely has its perks. In fact, according to MetLife’s annual Survey of the American Teacher, 62% of teachers surveyed said they were very satisfied with their careers.
The downside to teaching? Once the summer rolls around the paychecks stop appearing in your mailbox, making budgeting—at least for a few months—a bit of a headache.
According to Danny Kofke, author of “How to Survive (and Perhaps Even Thrive) on a Teacher’s Salary,” “paying yourself” is the key to staying afloat during the summer months.
In your particular example, in order to pay yourself, More…
Yesterday, Hoda, Kathie Lee and I sat down with our first mini-money makeover candidate, Kelly Whalen. Watch the video below to see how we helped her to reign in her weekend spending and be sure to tune in next Monday as we help another viewer makeover their finances.
The Money Mom
There are few things I like more than a challenge. Just ask my husband who heard me take the cable company to task the other night. (Suffice it to say when the Phillies game wasn’t coming in — again — despite the fact that we paid for the MLB package and the cable company wanted me to give them a three hour window for an appointment, I was having none of it. They are coming Sunday. At 8 a.m.)
Having Erin Chase, the mom behind the popular blog 5DollarDinners.com on my radio show yesterday felt like just that. A challenge. Could I make a dinner for four for $5 or less? Chase explained that her system involves couponing (natch) but also loading up on proteins, the most expensive component of most dinners, when they’re on sale. When boneless chicken breasts are $1.99 a pound, you don’t just buy a single pack, you buy four. Ditto ground beef. Italian sausage. Whatever your family likes. The freezer is your friend.
The whole conversation reminded me of my childhood. My dad was a college professor. My mom substitute taught. We had enough money but we certainly didn’t have a lot. And so my mother was a queen of inexpensive delicious meals. I don’t remember the entire rotation, but I remember a lot of it. Tuna and macaroni night. Chuck steaks that marinated the entire day. Rigatoni with meat sauce. My favorite — though — was Spaghetti and Clams.
Thanks to the canned clams, it’s a $5 dinner I make to this day. Enjoy.
Elaine’s Spaghetti and Clams
1 lb spaghetti or linguini
2 cans clams with the juice
1/4 cup oil (olive preferable)
2 cloves garlic, sliced
1 T parsley (if dried), big handful of chopped (if fresh)
red pepper flakes to taste
salt to taste
1/2 cup white wine or vermouth (whatever you have)
parmesan cheese optional
Cook the spaghetti. While it’s cooking, in a large skillet, heat oil, add garlic and cook until light brown. Add clams with More…
Read the newspapers these days and you’re seeing a lot of coverage indicating that there’s an economic recovery on the horizon.
* Last week, ADP said that employers cut 491,000 jobs in April, versus the 708,000 that were lost in March. In fact, job losses were at their lowest since November of 2008.
* Fed Chairman Ben Bernanke forecasted a turn-around for later this year, saying that conditions in the financial markets have improved and the banking system is gradually being repaired.
* President Obama said on Friday that “the gears of our economic engine do seem to be slowly turning once again.”
* The Dow Jones Industrials gained nearly 165 points and finished up 4.4 percent for last week – the eighth gain for the index in nine weeks.
Is this good news? Eh. What I really think it is is less-than-bad news. But the fact that it’s being played so positively could cause problems for you and me. If individuals follow these encouraging headlines they can become too optimistic and sabotage their financial future. When we feel too good, too powerful, too in control of the future, it tends to backfire. There are studies from Duke University that found that when people see the glass as too full, they behave in ways that aren’t good for their future. They overspend. They accumulate debt. They fail to save. On the other hand, mild optimists – people who are happy, but not complacent – save more and are likely to have emergency funds. More…
