End of Year Strategies: Stay the Financial Course through the Holiday Season

The end of the year holiday season can be filled with joy and anticipation, but it can also come with some financial stresses, even for dentists. For those on a budget, holiday expenses such as throwing a lavish gathering or giving your teenage child that brand new Lexus with a big red bow around it can play havoc with your financial plans. One way to reduce holiday-related stress is to have a holiday plan and stick to it. Here are some tips for holiday shopping that won’t get you off track.

Rewind and Review

Part of knowing where you’re going is knowing where you’ve been. Take a look at last year’s December credit card statements to get a better sense of what you actually spent, and compare it to what you plan to spend this year. Did last year’s Santa impersonation leave you cutting back on retirement savings or scrambling to pay off debt early in the New Year? Are there steps you can take this year to prevent the same?

Many budgets lose their effectiveness by leaving “miscellaneous” expenses lumped together into a confusing mess. Holiday spending isn’t exactly “miscellaneous,” though, is it? You do it every year, and you can quantify it. Measure it, estimate it, and incorporate it into your budget. If you’ve already finished your 2016 shopping, good for you! You can still measure what you spend and incorporate it into next year’s budget.

Consider Gifts that can’t be Wrapped

There is probably no shortage of gift ideas to consider for your loved ones. But it may also be a time to consider some more non-traditional gifts. No, I’m not referring to naming a star after that special someone; I’m referring to a starting a 529 College Savings Plan or a life insurance plan for a child or a grandchild. It’s a gift that won’t be played with right away, but it’s one that may make a huge difference in the recipient’s life. Most importantly, it’s a gift that, when the recipient is older, will be appreciated long after the hot new electronic gadget has been replaced by hotter, newer electronic gadgets. The gift of a savings account is timeless!

Another gift that can’t be quantified is a simple one: time with your loved ones. Many dentists take a few extra days around the holidays, but many others use the last few days of the year to squeeze in a lot of patients. It’s probably too late now to make drastic changes to your holiday scheduling, but consider any extra time you can carve out to be with the family as a gift to you and to them. If you can’t make it happen this year, consider it in your 2017 planning. Taking time to recharge is ultimately beneficial to you and your patients.

Use Debt Sparingly and Wisely

As always, taking on unexpected debt can not only lead to expenses that magnify through interest, but it can take funds away from investing for your retirement. If you already have a heavy debt load, consider scaling back the gift-giving season, starting the shopping early and paying only in cash, and adjusting your budget accordingly.

The holidays can be a hectic time, for sure. But staying the course through the silly season doesn’t have to be complicated. Focus on a few key areas, and you’ll be ready to hit the ground running come January.