The Ebbs and Flows of Seasonal Budgeting

Unsurprisingly, the season of cheer is also the time for unexpected purchases. At Capital Growth, we believe that every strong savings plan should factor in your seasonal spending. According to a survey conducted by McKinsey, approximately 40% of shoppers expected to get their holiday lists crossed off earlier this year than in 2020, due to anticipated shortages, shipping times, and supply-chain challenges from COVID-19. In fact, 45% of these respondents had begun their holiday shopping as early as October.

While looking for gifts can revive some of the holiday cheer that COVID had deprived last year, it’s still important to stick to your spending plan and avoid any unexpected withdrawals from your savings. Below, our financial experts at Capital Growth have gathered some advice to help you budget for and rein in the ebbs and flows of seasonal spending.

Learn To Be A “Financial Prepper”

In an earlier post by Capital Growth’s Matthew Belardes, he coined the term “financial prepper” as a way to keep up with unexpected spending and to practice healthy financial preparedness. In addition to managing debt and tending to your emergency fund, he suggests a reconsideration of all the things you might consider “essential.”

With travel and going out becoming increasingly possible once again, it’s worth stepping back to reexamine whether certain spending is really necessary. For instance, if your pre-pandemic plans included throwing extravagant holiday dinner parties for all your friends and family, maybe this year you can tone it down with a more intimate gathering with just a few homemade charcuterie boards and drinks. Keep in mind the likelihood that not everyone is looking to resume their pre-pandemic social lifestyles, and an intimate party could be exactly what they need.

Indulge with Smarter Shopping

Under the stress of COVID-19, shopping can be a spark of joy in an otherwise humdrum set of day-to-day routines. With the holiday season approaching, the impulse to spoil your loved ones can often outrank the desire to stick to your budget. These little opportunities for joy shouldn’t be resisted, but there’s no reason why holiday gifting should get in the way of your future plans.

Instead of gifting every single person on your list this year, why not include the element of mystery with a spirited game of Secret Santa? Or, since we now spend most of our time at home, you could take some time to dip your toes in homemade gifts, or even offer to help a relative around the house in place of something pricey. However, if you’re still planning on shopping for gifts, there are smart ways to do it: keep an eye out for promo codes by downloading some browser extensions, or take extra time to do your price comparisons and score the best deals out there.

Try Micro-Budgeting

With the additional inflation and shortages brought on by COVID-19, it’s more important than ever to regularly review your budgeting and make sure you’re keeping track of seasonal changes outside of your regular spending.

As this Wall Street Journal article suggests, micro-budgeting could be a good way to restructure your savings plan. Instead of sticking with a monthly budget, try choosing a more personalized time frame, for instance, from paycheck to paycheck. Developing a new spending plan according to pay periods can help you course-correct as you go, so you’re ready to spend smarter when your next paycheck comes in.

Alternatively, you can review your budgets by planning a handful of weeks ahead of a big event or purchase; that way, it can be catered to your seasonal spending. For many, overspending tends to be an accumulative effect that goes unnoticed until it’s not; with micro-budgeting, it becomes harder to sweep those things under the rug. By minimizing your budgeting to these micro-periods, you’ll notice an increase in the little moments of pride that can help keep the engine going.

The Secret to Seasonal Budgeting: Expect the Unexpected

Developing the perfect budget for your lifestyle isn’t a one-day process. The best budget plan is one that can evolve to include gradual changes from season to season. Especially with the changes brought on by COVID-19, expecting the unexpected is key to creating a strong spending plan. Revisit the things you need and the things you don’t, and keep your eyes peeled for new opportunities. Check out our COVID-19 Relief Checklist for tips on keeping your financial health even through uncertainties.

For everything else related to spending and saving, speak to one of our advisors today and we’ll help you settle on a future-proof plan that reflects your own style of seasonal budgeting.

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