Monday, April 28, 2008
Looking Forward For Holidays?
Looking forward to the holidays? Aren't we all... to have a decent break from the daily routine and grind (not to mention work pressure!) is just heavenly, be it temporary. Weekends are never long enough, are they? Hopefully, the laptop doesn't have to come along….
Before you take off to your dream holiday, have you planned ahead? Sure, you plan to do some sightseeing, relaxing, sport, dining and shopping. But more importantly, it is advisable to plan your spending. Before you overindulge on your holiday, remember, you will have to come back to reality and pay off the "goodies'' bill.
Here are some tips to be SMART about holiday spending:
1. Have a holiday budget
A holiday budget should already be part of your annual budget. This is advisable so that you don't spend two months' salary on just your holiday and starve the rest of the year. Your best guide is reviewing your last holiday expenses. If you've lost the records, do the next best thing – estimate. List out items you're most likely to spend on during the holiday - travel, accommodation, food, sightseeing, and of course, shopping.
2. Plan your shopping
Whether you realize this or not, when you're traveling out of town or overseas, everything you see on retail is a "must have" … with justifications such as "you won't find this back home" (really?!) or "it's definitely a lot cheaper here than back home". Controlling your whim during these worryless times takes a lot of willpower. What helps is having a list of things you intend to buy so that you don't go overboard. If you already know what you're looking for you can do some research, compare prices and get your items at the best bargains. Without any planning, you may end up buying an additional suitcase just to fit those new purchases. And oops… end up paying for excess baggage as well!
3. Spend your credit card wisely
It's so convenient to just swipe away and worry about the bill later. Beware! Your credit card is usually the source of major debt problems. To use it wisely, have a self check mechanism – record every purchase via the card and have a running tally so that you don't go over your planned limit. When you return and are refreshed from Happyland, don't procrastinate to pay off your debt. If you can't settle the debt early, you could strategize to have them all paid off within, say, 3 months. Otherwise, if you can't seem to control your swiping, resort to spending in good-old cash.
4. Teach your children the value of money
This is probably a tough one for most parents, but you must agree that a substantial proportion of cash outflow is usually to please your children's unwavering demands, and of course, you do want to keep them happy especially while you're all on holiday. Hence, if your children understand why you can only spend X amount on toys, you'll ease any disappointment they may have later.
5. Plan your gifts
It would be very generous of you, indeed, to bring back souvenirs for friends and family. However, make sure you're not buying under pressure. Set realistic expectations. There is no need to prove your success to anyone – all you're really doing is having a well-deserved break – you didn't strike gold, you know! You could make a list of gift recipients e.g. loved ones, close friends; jot down gift ideas and the estimated amount you sincerely wish to spend for each of them. Knowing what and how much would make you be less prone to impulse shopping and you can select early at the best prices.
6. Plan holidays ahead
A post mortem of your spending on return from your vacation is critical. Where did you overspend and why? So you had overspent on the gifts, perhaps your budget for gifts need to be increased next time, or perhaps you just need to spend less on gifts - your office colleagues would probably be just as happy to share some duty free chocolates instead of individual souvenir t-shirts; after all, it’s the thought that counts!
With early research, you can be sure to catch the best deals for the next holiday season. Procrastinators will lose out on bargain air fair prices and/or room availability during hotel promotions. Once your next holiday is already budgeted for, you can start saving early.
7. Future cash flow
Saving money and minding your spending shouldn't just be a priority around the holidays. It should be an everyday habit, but take care of the fundamentals first – paying off credit card balances or debts and saving for education or your retirement. It is also recommended to have an emergency fund worth 3 to 6 months' living expenses in a cash account, in case of that rainy day.
There you have it, 7 habits for a highly-effective holidaymaker for you to adopt immediately. You can now go on that holiday with peace of mind and ensure that you won't spend money you don't have.
So before you plan the next holiday, here's another self check: are you still paying off last holiday's bills? You have been warned.