By Jen Haro, Finance Writer
Happy New Year! Did any of your resolutions have anything to do with money? Mine did (they always do). Hopefully, you made it through Christmas financially intact and don’t have any big credit card bills coming later this month. That’s not normal though, so I expect a lot of you do. It can be a big shock when they arrive, especially if you weren’t keeping track of the spending (or your husband bought you a really nice gift). If you don’t want that post-Christmas credit card shock, here’s what you should do, starting RIGHT NOW (or tomorrow is good too, or when/if you get your credit card(s) statements – just don’t procrastinate too long):
- Tally up how much you spent on Christmas. That’s right. Go through your bank statements. Add up every debit purchase on holiday party goods, gifts, food for special meals. You don’t need to be so nit-picky that you’re adding up flour and that $2.99 sheet of labels. But you should include Christmas cards, stamps, wine you brought to a party, the stuff you bought on Black Friday, all your online shopping, trips to Target that you wouldn’t have made if Christmas wasn’t coming, the big ticket food items, etc. What’s the final number? Sometimes it’s hard to look at, but you must look at it. Do you think you went overboard, or is that an average Christmas?
- Pick a number for next year. After thinking over your number, do you think it was about right? Are there areas you can cut back next year? Come up with a reasonable number and write it down.
- Divide by 12. That’s right. Divide. I need a calculator for this (I’m terrible with head math). This will be your savings goal for every month. Even January.
- Open another bank account, or get an envelope. My credit union (credit unions rock!) allows me to have as many savings accounts as I want, and I can name them whatever I want. “Christmas Account” works well for this one. Hopefully your bank or credit union will allow the same. If you tend to shop in person, and not so much online, you can use an envelope. Label envelope “Christmas”, or something just as obvious or witty. Put it somewhere your kids can’t find it, and threaten husband with whatever most threatens him if he touches it.
- Put money in account/envelope. I have electronically scheduled transfers that occur on paydays. That way, the money doesn’t stay in my account for more than a few minutes, so I don’t even miss it. If you do manual transfers, you may likely “need” the money for something else. If you decide to go the envelope route, you’ll need to withdraw cash (put don’t pay any ATM fees!), and put it in the envelope. (Note: money has been known to disappear from envelopes, like when you need to go to the grocery store, pay the babysitter, get a coaches gift, etc. Do not let this happen! It may have less of an impact if you take the money out more than once a month, depending on your payday schedule.
- Watch it grow. It’s pretty amazing how fast money can grow when you leave it alone. If you do this. You should be all set for next year, and not be so scared when the bills arrive. If you’re one of those super organized people that shop all year, it can still work for you too.