When making decisions about where to spend money, generosity often trumps or supersedes money concerns at this time of year. For some, it can be so difficult to go against this pattern, they actually feel helpless to control their spending, budget or not.
In a recent Investors Group poll, 1 in 4 Canadians feel helpless to control holiday spending. Two-thirds of this group admit this is a reflection of how they handle their finances, year-round.
Even with a budget, they feel out of control. I suggest this is because a lot of people misunderstand the difference between a budget, and budgeting as part of their day-to-day lives.
What is a budget? Is it a series of numbers entered into an Excel spreadsheet?
Yes, but that is only the beginning. To make it work, there needs to be a system in place that will bring the spreadsheet to life, out in real world application.
There’s a quote I love: ‘Personal finance is more personal than it is about the finance.’ We’re emotional people. We spend for all sorts of reasons. The holidays simply highlight our existing patterns.
With that in mind, remember that actual budgeting starts where the Excel spreadsheet stops. To stick with it, get help. At the very least, shop with a plan – you can’t go into a buffet and expect to be 10lbs lighter when you leave. In the same way, don’t subject yourself to the buffet of shopping opportunities out there without a list, a plan, and some help to stick with it, and make the budget work in practice.