The holidays are upon us, and whether careful planning occurred, or you have decided to “wing it”, the season as a whole can be a financial burden. Thus, with Christmas 19 days away, even the savviest shoppers feel the pressure to execute holiday shopping effortlessly. When examining such pressure further, we find that family, children to be exact, are sources/a source of pressure. Likewise, if you have a tight budget, or are living paycheck-to-paycheck, your plans will more than likely be adjusted. Nevertheless, should the pressure begin to rapidly mount, talk to your doctor about the benefits and setbacks of heavily relying on Excedrin to relieve headaches. On a serious note, allotting time to plan can help avoid the additional stress incurred due to overspending. Thus, as you rev up your shopping engines once more, having cruised at 130 mph during Black Friday, or are starting to take your first lap, I emphasize the importance of discussing and defining needs vs. wants with children.
To start, use their favorite monthly magazine or circular found within their favorite stores. Next, provide your child with scrap paper and a pen, which will be used to draw a line down the middle of the page. One side of the page should be labeled “I want this!” while the other is labeled “I need this!” Then, looking through the magazine or circular with your child, help them count the total number of marked items. Utilizing this total number, have your child classify which items are “wants” and “needs”. Once they are finished, have them tally up the score. If one side is larger than the other, debrief and talk through the choices. Finally, commence joint research on the difference between cost vs. price and worth vs. value. When researching, it is key to note that, often, cost, price, value, and worth are frequently used interchangeably although their definitions differ. For example, the price attributed to an item is the amount of money required to purchase a good or service, whereas the cost of an item is determined from the viewpoint of the customer. In examining value, when a customer values a good or service, they are expressing how much they “love” it. Thus, while value is not numerical, one can compare the value of two or more items, especially when the products serve the same purpose. Moreover, it is not uncommon for people to equate price with value. However as prices fluctuate, your value for the item may not. For instance, if you intend to purchase a backpack for your child at the price of $20, the backpack may be viewed as great value. Conversely, if you intend to purchase a sweater for your partner at the price of $60, the sweater may not be viewed as important, therefore not valued. As a result, it is important that people learn to differentiate between price and value. Furthermore, in researching worth, you will discover that the term is used to refer to the cost of a good or service being bought or sold. Example: If you are a homeowner, your house may be worth $900,000. In this case, worth determines how much your house will sell for in the real estate market. With new terms and definitions at your disposal, incorporating your understanding with a few simple tricks, will not only help you get organized for the holidays, but will ensure that your efforts are successful. The first trick is a go-to classic – set a budget. After taking inventory of your routine monthly bills such as groceries, rent, and utilities to name a few, subtract those expenses from your overall budget. The remaining amount is a ballpark estimate of how much you will be able to spend on gifts. Thus, as always, early action planning and realism will help in making sure you do not overspend. The second trick is to make a list. Being prepared with a typed list, crossing items off as you go, and checking it twice and thrice, saves you from leaving anything off and anyone out. The third trick is to decide how you are going to pay for your purchases, and stick to it. Essentially, firmly sticking to using either cash, credit, or debit allows you to not only budget properly, but avoid flip-flopping between payment methods. Such teetering can result in declined cards, overdrawn accounts, and dreaded overdraft fees. Finally, be sure to frequently monitor your spending as you hop from site to site and store to store. While you may be equipped with a budget, it will be easy to veer off course and dip into saved funds. Avoiding post-holiday surprises is the name of the game. Although unforeseen hiccups can arise, preparedness is key. The goal of the financial holiday season is to incur minimal to non-existent credit card debt, and sidestep ongoing low balance account alerts. To accomplish this feat, be alert and come to all counters (tables) competent.
2 Comments
Breanna Edwards
12/18/2017 22:49:03
I am becoming big on saving because I never knew the importance of money. This was right on time. I tried my hardest not to overspend this Holiday season. Great post and right on time
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