There is a lot of talk of supply chain issues this year and how they could pose a real threat to holiday shopping. If you were ever planning on starting your shopping early, this might be the year you actually want to follow through on those plans. First, what is causing the supply issues? It is actually a combination of several factors including a lack of production during the pandemic, a dramatic increase in the cost of materials, shipping issues from China, and a massive shortage of truck drivers here in the U.S. All of these combine to create a perfect storm of delays for holiday items. So how can you avoid most of these problems?
First, shop local. Items found in local stores may cost a few dollars more (but not always). Supporting local businesses is just a good idea all around. Remember, they’re the ones supporting your kids’ sports teams, etc. not the big box stores.
Buy handmade items that are produced in the USA by local artists. This again supports the local businesses and reduces supply chain concerns.
If you are going to shop online, start early. There will almost certainly be delays as we get closer to the holidays, and the “hot” items will be even harder to get than usual.
With all of that said, you may even want to re-think exactly how much of all this “stuff” you really need to buy in the first place. Maybe this year is a great time to start doing what we always swear we are going to do, and that is to simply give everyone less. Every year I’m borderline horrified by how much “stuff” my kids get from holidays from not just us but extended family as well. Less is definitely more when it comes to overloading kids with gifts. One thing I have planned for when my kids are beyond the “Santa years” is to travel together instead of buying gifts. The idea of giving my kids lots of Christmas presents once they no longer “believe” seems silly to me. The memories of travelling together will last a lifetime compared to a toy that will be forgotten, lost or broken in the next 6 months. My plan is to take all of the money we would have budgeted for gifts and instead decide as a family where we can go based on that budget amount.
This leads us into the next topic, staying on budget. It’s the most wonderful time of the year. That is until you get the bills in January. That happy mindset changes for some of us when the fun is over, and we are not only back to reality but now we have a lot of extra bills too. Keeping your budget on track is key to helping you not go into debt during the holidays. What are the best ways to keep a budget and still have a great holiday season?
The first way to plan for the holidays is to start saving early. Remember the old “Christmas Club” savings accounts? You put in a little money each week and by the end of the year you had all of your money saved for gifts. This is something that needs to make a comeback. Setting up an auto-transfer each week from your checking account, etc. to a separate account that is used only for the holidays is a great way to stay out of debt after the holidays are over. Even just $10 a week means $520 to spend at the end of the year. $20 will give you $1,040. Whatever you want to spend, just divide that number by 52, and that’s what you need to save each week. Saving in advance is only part of the equation. All of that is wasted if once you start shopping, and you start using our credit cards. Use debit cards only for your holiday shopping. If you haven’t saved the money before the holidays, then you can’t spend it, period. I know that doesn’t help you for this year since you’re just reading this a few weeks before Christmas but implement this system January 1st in order to be prepared for next year.
What do you do about this year? Write out your budget before you shop. The simple act of writing something down holds you more accountable to following it. Start thinking about ways to earn extra money over the holidays to pay for all of your purchases. There are always a ton of seasonal opportunities for side jobs around the holidays to earn extra cash. Once you know your budget, you will know exactly how much extra you have to earn (net of taxes) to pay for your presents.
I hope these ideas are helpful both now and for future holidays, and most importantly, I wish you all a safe, healthy and happy holiday season.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.