Financial Planning Tips for the Holidays

Seasonal Spending: Financial Planning Tips for the Holidays

Financial Planning Tips for the HolidaysAccording to a National Retail Federation survey conducted by Proper Insights, American consumers plan to spend an average of $935.58 during 2016’s holiday shopping season.[1] While giving and receiving gifts this holiday season is intended to be a joyful tradition, don’t put a damper on your holiday season by winding up financially overextended and stressed out. Here are some holiday budgeting and financial planning tips for the holidays to help guide you into making sound holiday spending decisions:


Reduce the number of gifts you have to buy by having “Secret Santa” or “White Elephant” gift exchanges: Buying a gift for everyone on your holiday gift list can be burdensomely expensive (and time-consuming to boot!), especially if you have large family and friend groups. To save money this year, considering proposing a “Secret Santa” or “White Elephant” gift exchange with a designated budget for the gift (e.g., no more than $20 per gift), which will dramatically reduce the number of gifts you have to buy and your holiday season expenditures.

What is a Secret Santa gift exchange? “The basic concept of the Secret Santa game is simple. All of the participants’ names are placed into a hat, box, etc. and mixed up. Each person then chooses one name from the box, but doesn’t tell anyone which name was picked. He/she is now responsible for buying a gift for the person selected.”[2]

What is a White Elephant gift exchange? This popular gift exchange involves each player bringing a wrapped gift to contribute to a common pool of gifts for all the players. Players vie to walk away with the best/most desirable gift from the common pool of the gifts. There are many different ruleset variations for this game, ranging from simple to elaborate, which you can easily research online.[3] Decide on a ruleset ahead of time and inform all the invited players of the ruleset ahead of the gift exchange.


Consider using only cash as a strategy to reign in your holiday spending and prevent impulse buys: Shoppers are more cautious about spending when using cash instead of credit cards. People are more likely to make impulse buys when shopping with a credit card. Also, people have more of an emotional attachment to physical cash than they do with a plastic credit card. When you spend cash, you see that you have less of it in your wallet than you did before the purchase and process this accordingly. To the contrary, when you spend money on a credit card, you do not instantly see the result of your expenditures but rather only see it when your credit card statement arrives in the mail a month later. A 2014 Dun & Bradstreet study, where the company found that people spend 12-18% more when using credit cards rather than cash, is frequently cited to back up this behavioral economics assertion.[4] Accordingly, if it’s possible to use cash for your holiday shopping, you may be more likely to stick to your budget than if you went shopping with your credit cards. A few caveats: keep in mind that using cash isn’t without any cons. Theft rises during the holiday seasons and holiday shoppers can be targets. Unlike credit cards, if your cash is lost or stolen, it’s likely gone forever and you will have a difficult time getting it recovered or reimbursed. Also, when you use cash, you don’t have the useful option of electronically tracking your spending and having a recourse for defective or problematic purchases.


Use credit cards judiciously: If you want or need to use credit cards for your holiday spending, do so judiciously. If you can’t pay off your credit card balance in full after your holiday shopping expenditures, figure out how much money you will actually end up paying when you repay your credit debt. To help you calculate this number, use a free online credit card debt payment calculator. For example, this free online debt repayment calculator “will show you how long it will take to pay off your credit card debt. Choose from making the minimum payment, a fixed amount of your choosing, or a time when you would prefer to be debt free.”[5] If you won’t be able to pay off your credit card purchase in full, use the credit card that has the lowest interest rate for the purchase. If you will be able to pay off your credit card purchase in full, consider leveraging credit card rewards (e.g. cash back on certain categories of purchases or a credit card that gives you airline miles for your purchases) to get more bang for your buck.


Give the gift of charity for the holidays: This holiday season, give your loved ones the gift that gives back (in more ways than one)—the gift of charity. You can give someone the heartfelt, philanthropic gift of a contribution to a charitable cause that’s meaningful to them (e.g., United Way, American Cancer Society, Salvation Army, and etc.). You may be able to claim a charitable deduction for this gift if: (1) you file Form 1040 and itemize your deductions on Schedule A; (2) you keep a record of the charitable donation; and (3) the charitable donation is made to a qualified organization. To see if an organization is a qualified organization, click here to use the IRS’s Exempt Organizations Select Check online search tool. For more detailed information about the rules governing income tax deductions for charitable contributions by an individual, click here to view the IRS’s online information regarding this matter.


Plan ahead for 2017 holiday spending: On the Summit Brokerage blog, we discussed New Year’s financial planning tips and resolutions in this previously published blog as well as in this previously published blog. However, one specific tip we didn’t discuss in either of these blogs was to plan ahead and budget for next year’s holiday expenses. Look over your holiday spending habits from 2016 as well as any recent past years that you have records of your holiday spending for. Based on this information as well as your financial goals and any anticipated major expenses for 2017, come up with a reasonable budget for your 2017 holiday spending. Set up a holiday savings account and decide on what your monthly contribution to the account will be.

Tis’ the season to be merry, not stressed about overextended finances and worried about starting off the New Year underwater in debt from holiday spending. Through thoughtful holiday budgeting and using some of the above discussed financial planning tips for the holidays, you will hopefully be able to keep your spending under control and in turn make the holiday season more enjoyable and relaxing.


For more information on Summit Brokerage Services and the first-in-class services offered by our independent financial advisors, visit or call us at (800) 354-5528.


About Summit Brokerage Services, Inc.

Summit Brokerage Services is part of Cetera Financial Group. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.


About Cetera Financial Group

Cetera Financial Group® (“Cetera”) is a leading network of independent retail broker-dealers empowering the delivery of objective financial planning advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions.  Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.

Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations.  Advisor support resources offered through Cetera include award-winning wealth management and financial planning and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology.  For more information, visit

*”Cetera Financial Group” refers to the network of retail independent broker-dealers encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities, The Legend Group and Summit Brokerage Services.




[3] The following website gives an example of one of many rulesets for a White Elephant gift exchange:



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