Top 3 Ways to Avoid Going "broke" this Holiday Season

Anonymous: "Cheers!! Tis the season to be jolly, loving, giving, carefree with our money, and joyfully begin the new year in a deeper hole than where we are now, right?"

Me: "Absolutely not."

Anonymous: "But Eric, the holidays are all about family time."

Me: "I agree, but it should not be at the expense of digging yourself into a deeper hole financially."

Anonymous: "Why not? The holidays are always about sacrificing oneself for the sake of ensuring that my friends and family are happy."

Me: I agree, so long as you have the means to do it without setting yourself back too far.

Anonymous: "Ok well my brother and his wife are expecting us to visit his home in Utah for Christmas. I priced the airline tickets for our household to get from the east coast to Utah to be at least $3000. I do not have that kind of excess cash right now but I can start paying it off at the start of the new year."

Me: "Why didn't you budget for this trip before now?"

Anonymous: " You know how it is...life happened and then I completely forgot about this trip until recently."

Me: "You can claim that you forgot about this expenditure until recently, and then use that as an excuse to go deeper into debt by the start of the new year because of your forgetfulness. But see here's the thing, everyone knows that Thanksgiving, Christmas, and New Year's always shows up on time. For instance, Christmas never shows up late. On any given year, on December 25 at 12 am, Christmas is going to be here right on time all the way down to the second!"

"So for you to plead negligence of this well-known fact can only be described as one word. Irresponsible. You had all year long to prepare for holiday expenses. You went to the movies countless times this year. You went shopping for shoes and clothes more times than you can count on one hand this year. You purchased a brand new gym membership as your so-called 2017 New Year's resolution that you barely even used this year. You went out for dinner and drinks with friends numerous times this year. And yet all year long you claim to have never thought about budgeting for holiday expenses until now? Inexcusable..."

"I highly advise you to put off the trip to Utah this year and work on being better prepared for the next holiday season. Sooner than later you will become no good to your friends and family during holiday seasons if you continue to neglect the proper management of your own wealth. The secret is that when you focus on properly managing your own wealth first rather than neglecting it, you will soon discover that you will actually be positioned to give so much more during the season of giving."

Santa passes out from a heart attack caused by the heartbreak of seeing yet another household dive deeper into debt during the holidays

I wanted to kick off this article by sharing some dialogue that I had with an old friend of mine literally just two days ago. Way too often people extend themselves well beyond their financial means during the holiday season, and then they find themselves having to dig out of an even deeper hole at the start of the New Year. This is called stagnation, whereas you are running in place like a hamster on a wheel with no progress to show for it. With that said, I have listed my top 3 ways to avoid going broke this holiday season.

1) Avoid holiday purchases that will require the use of debt

To put it simply, having to use debt to cover holiday expenses is a clear indication that you have failed to prepare properly. You failed to prepare even though you knew that the holidays were going to arrive on the same date and time as they always do. You failed to prepare even though you had a whole year to budget for holiday expenses. You failed to prepare even though you knew that you wanted to be in a position to give during this season of giving.

My recommendation is to simply suffer the consequences so that the lesson learned from unpreparedness will hopefully propel you to become better prepared next time around. Swallow your pride. Tell mom and dad, friends and family, the children and so on... "You know what, I cannot give as much this year as I would like to give because I have failed to budget properly for this holiday season. I mismanaged my wealth this year." Go ahead and suffer the embarrassment and whatever else comes along with failing to prepare properly, and then utilize this predicament as fuel for your fire to resolve to never place yourself in this position again due to mismanaging your wealth.

2) Develop your New Year's resolution now, not December 31st

Develop your New Year's resolution before you begin to splurge on others this holiday season. Write it down, read it over 10 times, and then fully commit yourself to it. The next step is to take a close look at your holiday expenditures. Place your holiday expenditures and your New Year's resolution side by side. Then you can see exactly where adjustments may need to be made if the two are not in complete alignment with one another.

The whole point of this exercise is to ensure that you start off the New Year going forward, not backward.

3) Deploy the tremendous power of saying "NO"

There have been countless times where I see an acquaintance of mine start off the new year in a deeper hole than they began with simply because they refused to say NO.

"I don't want to disappoint anyone."

"I don't want to come off as being mean."

"I don't want my friends to not like me anymore. I want to be liked by everyone."

Excuses...excuses...excuses. If anyone will no longer like you simply because you said no to this year's holiday getaway party then it is probably time to deconstruct and rebuild your inner circle. Deploying the power of the word NO in many cases will induce the avoidance of financial stress going into the new year.

I challenge you to be financially smart this holiday season.

Take charge of your money!

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Disclaimer: Hudson Wealth Management, LLC (HWM) is a FINRA registered investment adviser firm. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Before investing, consider your investment objectives and HWM's fee schedule. The information provided herein is for illustrative purposes only and does not constitute personalized investment advice, recommendations or solicitations to hold, buy or sell any investment or security of any kind. All images and return figures shown are for illustrative purposes only and are not actual customer or model returns. Past performance does not guarantee future results.

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