By Tiffani Robinson, Contributing Writer
The feeling of Christmas is in the air. The smell of Christmas trees, poinsettias, and visions of green and red grandeur can be hypnotizing. However, before you head to your favorite department stores, below are my budget tips you should consider before you spend your hard-earned cash this season.
Tiff the Tax Lady’s Three Budget Tips
- Cut your Christmas list short this year. Is this person you are about to buy a gift for an immediate family member (i.e., spouse, child, or parent)? Far too often Christmas is used as this opportunity to make impulsive purchases for those we love. The gratification of giving to others can be addictive. However, limiting your Christmas shopping list will limit those impulsive urges and promote you saving your money. Should you still feel the need to indulge, do your entire legacy a favor, and invest that money into an investment vehicle that can give you a return.
- Ask yourself the million dollar question, “Is this in my budget?” If your initial answer to this question was yes, you are blessed to be a part of a small percentage of people, with the disposable income to spend. In short, this message is not for you. However, if you are amongst the 85% of Americans living paycheck to paycheck, your disposable income does not afford you the opportunity to go over budget. That money should remain in the rainy day fund. In addition, your credit cards are not considered liquid cash. I know that saddens you who love to receive incentives to utilize your credit cards. However, if you were demanded to pay that balance today, could you do so without dipping into your savings or investment vehicles?
- Pay attention to the outlook on the economy. Before you think I’m not embracing the Christmas spirit, consider the facts. The increase in the nominal GDP has forecasted to return to 2% in 2017 and 2018. A decrease in nominal GDP typically means you should slow down on your spending, as slow economic growth tends to lead to layoffs and unemployment. With the unemployment rate expected to remain in the natural rate, those who are unemployed will have a hard time re-entering into the job market. Considering the expected increases in the federal funds rate, we can expect to pay more for loans and mortgages. We must be cognizant of current and forecasted GDP levels, as this can help drive the decisions your make regarding your personal and business budget.
Embrace the true spirit of Christmas, and learn to celebrate the holidays with love, laughter, and memories,while remaining budget conscience.
Tiffani Robinson has over 10 years of experience as a finance, accounting, and tax professional. With experience as a consultant in the E&P, Oil & Gas, and investment markets, she has excelled in financial reporting & analysis, preparation of annual budgets, and managing month-end close processes. She is the owner of Regency Consulting and Tax Solutions Group, utilizing her expertise to provide business consulting, tax preparation, and tax solutions to individuals and businesses. With a special interest in the small business community, she is focused on supporting startups and teaching them how to strategize like a finance professional. Visit Regency Consulting and Tax Solutions Group at www.regencytaxsolutions.com. Follow her on Facebook and Instagram @TiffTheTaxLady.