Plan Your Way Through End-of-Year Expenses

As the leaves turn golden and the air grows crisp, we can’t help but look forward to heartwarming holidays, joyous parties, and reunions with our loved ones. But before we dive headfirst into the festivities, we need to talk about something serious – expenses. Yes, those dreaded expenses can quickly shake our budget stability if we’re not careful.

At Ballast Advisors, we’re all about creating a comprehensive financial planning strategy that considers every season of the year, especially the high-spending final months. While research says U.S. consumers overall have cut back on spending this year (and they plan to continue to do so through the holidays), it’s good to explore some strategies for how to best budget through the end of the year.

Forecast and Allocate

Holiday budgeting requires some forethought. Before November and December shopping frenzies hit us like a whirlwind, let’s take a moment in October to lay out all potential costs. Yes, I’m talking about making a list (and checking it twice):

• Holiday Gifts:

  List out everyone you plan to gift and, most importantly, allocate a budget for each. Make sure Santa’s not the only one doing some serious list-making this year.

• Parties and Dining Out:

Whether you’re hosting a gathering that will go down in history or simply attending a fabulous soiree, there’s always a cost attached. In the last 12 months alone, grocery prices have increased 4%. You should factor in the fantastic food, the flowing drinks, and maybe even a dazzling new outfit.

• Travel:

  Planning to escape to a winter wonderland or visit family? According to Forbes, the average 3-day getaway cost the solo traveler around $1,400. Account for transportation, accommodation, and those day-to-day expenses that sneak up on us. Being prepared will not only save you some serious cash but also some unnecessary stress.

Here’s a tip: ditch the last-minute frenzy. Holiday shopping is no longer just for November and December. Many major retailers rolled out Black Friday and Cyber Monday promotions as early as October. By starting your shopping early, you can spread out expenses and make more informed decisions. Plus, you’ll avoid the panic-inducing crowds that come with leaving everything until the last minute.

Embrace Cashback and Rewards

If you haven’t hopped on the rewards credit card bandwagon yet, now might be the perfect time to join the party. Many cards offer some seriously generous cash back on purchases, especially during the holiday season. We’re not saying you should go wild and spend recklessly, but strategically using your card for planned expenses can lead to some sweet rewards or cash back. Remember to pay off those balances in full to avoid unwanted interest charges.

Tax-Savvy Holiday Spending

While we enjoy the present, let’s not forget about the future. Did you know that some of your end-of-year spending can actually lead to tax benefits? According to CCS Fundraising’s Philanthropic Landscape Report, 50% of U.S. households give annually—and a whopping 81% of affluent households give. Here are a couple of ways you can be financially savvy and spread the holiday cheer:

• Charitable Giving:

  Instead of your usual run-of-the-mill gifts, consider making a charitable donation in someone’s name. Not only will it bring joy and support a noble cause, but it’s also tax-deductible. Talk about a win-win situation!

• Donor Advised Funds:

  Oh, the magic of Donor Advised Funds (DAF). These nifty vehicles are administered by a public charity to manage donations on behalf of organizations, families, or individuals. By setting up a DAF, you can make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. It’s like being Santa Claus all year round!

These measures offer some tax relief and emphasize the true spirit of the holidays – giving back and making a difference.

Keep A Buffer

No matter how meticulously we plan, life always throws us some surprises. It could be an impromptu dinner invitation, a forgotten gift, or even an unexpected upgrade during your travels. That’s why it’s crucial to keep a small financial buffer. With a little cushion, you can manage these surprises without straying too far from your financial goals. Time to be prepared for the unexpected!

Wrapping it Up

As we bid farewell to another year, remember that the end of the year should be about joy, reflection, and the warmth of togetherness. It shouldn’t be overshadowed by financial stress. By integrating these strategies into your October financial preparations, you can ensure that you’re not just spending, but spending wisely.

And hey, at Ballast Advisors, we’re not just your ordinary financial planners – we’re your partners in every financial journey. So, if you find yourself overwhelmed or need personalized advice tailored to your unique circumstances, don’t hesitate to reach out.

Connect with our amazing team to ensure that your holiday budgeting aligns with your comprehensive financial goals. Let’s conquer the year-end with confidence!

Note: While this blog offers some incredible financial advice, consulting with your financial advisor for tailored advice suitable to your specific situation is essential.

Important Disclosures

The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice. The third-party material presented is derived from sources Ballast Advisors consider to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing contained herein is an offer to purchase or sell any product. This material is for informational purposes only and should not be considered investment advice. Ballast Advisors reserve the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request. BAL-23-75