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Don't Blow Up Your Finances on Christmas

Let's face it 2020 hasn't been a good year for many people. So in case 2020 hasn't been good to you, I'm giving you per

mission to not feel guilty about Christmas! Christmas is supposed to be an uplifting time of the year to celebrate, but don't let it become all about the gifts.

If gifts is one of your love languages (Gary Chapman's 5 Love Languages book), then it's easy to go overboard at Christmas, and going overboard can cause some serious problems for your budget. It's definitely been a problem for me in the past especially with six kids!

Let me share a few things with you that I've learned about Christmas over the last 50 years.

Gifts are easily forgotten. In the moment, gifts are great. There's nothing quite like stacking up presents under a tree and watching them grow throughout December as the family gets closer to that December 25th date. Now after 50 Christmas celebrations I can only recall a few of the past gifts I've given or received. I remember the telescope my parents gave me, but it's long gone. I remember the 35mm Canon Camera, the star wars action figures, and the immense amount of legos. I also remember the 7hp racing go-cart and the wild ride my dad and I had in the local high school parking lot with him perched on the back yelling, "hit the brake! hit the brake!" as I drove wildly around dodging everything in sight. I think I was 10, and it was the last time we drove the go-cart. I guess dad thought one life or death ride with me was enough.

Traditions trump gifts. As a kid, I didn't think much about traditions or really notice them, but

looking back, I loved them. The time with family at my grandmother's house where I saw my aunts, uncles, and cousins. Where we watch Christmas movies and ate those marvelous sausage balls and deviled eggs. It was an amazingly magical time.

My wife spends time baking some of her family's favorite Christmas dishes including the baked cherry candy cane pastry that usually disappears within 30 minutes of coming out of the oven.

And of course the tree. In our family, the tree goes up the Friday after thanksgiving and is usually an eventful time. While my daughter and I prefer a very neat and orderly tree, the rest of the family prefers a more randomly decorated and non-color coordinated tree, so we have two trees for each side of our family's creative styles.

Focus on family your bonds. Now with my own family of six children with my oldest son being 20 years of age, traditions mean everything. More than the gifts, my wife and I are trying to create special moments of bonding and communication. Family games and family trump gifts. Whether its cards, a board game, or a night of hide-n-seek and sardines through the house, family time is everything.

2020 has required us to be much tighter with our finances. Yes, even millionaires need to watch their money. As a result, we'll be thin on gift giving this year, but we'll still find joy in Christmas. I have no doubt that we'll be up late on Christmas Eve enjoy food and fun with each other and wearing those new Christmas pajamas that mom gives out as one of our traditions.

A Few Tips for Christmas 2020

  1. Do not put your Christmas on Credit. If you don't have the money to buy the gifts, don't make a mistake by putting your Christmas on your credit cards. It's not worth it!

  2. Make a budget and make it reasonable. Don't let yourself feel guilty or force yourself to overspend if you don't have a lot of money to buy gifts at Christmas. Work within your budget. As a rule of thumb, try 1% of your income. If you make $50,000 a year, try a $500 budget for gifts. If you make $100,000 income, try a $1,000 budget.

  3. Think about your Christmas budget in conjunction with your life's financial goals. If you overspend for on Christmas, you could be setting back your financial goals in a big way. Very few people consider how their Christmas spending will affect their future. Things like retirement, paying off debt and investing. Here's an simple formula to help you assess your Christmas spending and the future value your money. (65 - Your Age) / 7 = Doubling Cycles based on 10% investment annual growth For a 35 year old, $1000 spent has a future value of about $16,000 at age 65. (65 - 35) = 4.28 Doubling Cycles $1,000 - $2,000 - $4,000 - $8,000 - $16,000 (future value at age 65)

I hope you and your family have a merry Christmas and always remember, money doesn't make Christmas special. People do!


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