7 steps to make a financial plan for the end of year holidays
The end of the year marks a time of celebrations, gifts, gatherings and, inevitably, increased expenses.
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In fact, without proper control, the festivities can generate a series of debts for the following year.
Recent data from IBGE indicate that Brazilian inflation has directly impacted the cost of living, with increases of more than 4.6% in the last twelve months.
Therefore, organizing a financial planning for the end of year holidays has become a necessity for those who want to enjoy the season without straining their budget.
To ensure your financial planning is effective, we've detailed a seven-step guide with practical strategies and up-to-date data.
These steps are designed to help you get organized, control your spending, and maintain a balanced budget.
1. Set the Total Budget for the End of the Year
Setting a total budget is the first step in holiday financial planning.
Consider how much you can invest without jeopardizing your regular financial obligations.
It is recommended to follow the 50-30-20 rule, which directs 50% of income to needs, 30% to wants, and 20% to financial priorities, including savings and investments.
This method helps to balance finances, making the period more financially secure.
For many Brazilians, the lack of a clear budget results in excessive spending.
The National Confederation of Commerce (CNC) indicates that approximately 671,000 consumers end up in debt after the holidays. This scenario highlights the importance of a well-structured budget to avoid excessive use of credit or compromising future income.
"Budgeting is about having control over your money, not letting money control you." — Warren Buffett
2. Make a Detailed List of Expected Expenses
Organize a detailed expense list for all party-related activities and items.
This makes it easier to identify where to save and prioritize the items that are truly important.
The main expenses include gifts, food, decorations, travel and even special clothing for celebrations.
When creating this list, consider the main categories and subcategories. For food, for example, you might include Christmas dinner dishes, desserts, and drinks.
For gifts, categorize by group, such as family, coworkers, and close friends.
In a scenario of food price increases of around 8.1%, according to the IPCA, planning purchases in advance can represent significant savings.
3. Prioritize Your Holiday Financial Planning
For successful financial planning, establishing priorities is essential.
For example, if Christmas dinner and gifts for family are more important, focus on making sure those items are included in your budget.
This way, you maintain financial balance and avoid unnecessary debt.
If your budget is tight, consider giving up less important items.
For example, spending on New Year's parties can be replaced by more intimate gatherings or even a home-cooked dinner.
It's important that your financial planning for the holiday season sticks to your initial budget and reflects your priorities and values, avoiding impulsive spending.
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| Category | Estimated Expense (R$) | Priority |
|---|---|---|
| Gifts | 500 | High |
| Food and Supper | 800 | High |
| Decoration | 200 | Average |
| Parties and Travel | 300 | Low |
| Others | 100 | Low |
The table above helps visualize the distribution of expenses, prioritizing the most relevant categories. This organization allows financial planning to remain sustainable.
4. Research and Buy in Advance
An effective way to save money at the end of the year is to buy things in advance.
Purchasing products and gifts in advance avoids the pressure of high prices and last-minute promotions, which are often not as advantageous as they seem.
According to industry experts, shopping in October and November offers savings and helps avoid stress.
Black Friday and Cyber Monday are opportunities to purchase gifts and home decor items at reduced prices.
According to NielsenIQ, 60% of Brazilian consumers use these dates to anticipate their end-of-year purchases.
By adopting this practice, you reduce the need to spend in December, a period when prices tend to be higher due to demand.
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5. Embrace DIY (Do It Yourself)
The concept of “do it yourself” (DIY) Do It Yourself) is a growing trend that can help cut costs and add a personal touch to holiday parties.
From Christmas decorations to Christmas dinner recipes, making items at home is a creative way to save money.
Creating personalized decorations with recycled materials or preparing homemade desserts instead of buying ready-made ones are examples of practices that contribute to balanced financial planning.
Kantar found that searches for DIY items increased by 12% in the weeks leading up to the end of the year, reinforcing the popularity of this practice.
6. Set aside a Holiday Emergency Fund
Despite all your planning, unforeseen events can arise. Therefore, it's recommended to set aside a small portion of your budget as an emergency fund.
This amount can be used for unexpected situations, such as buying a last-minute gift or replacing damaged items.
Generally, 5% of the total budget is enough to cover unforeseen events without compromising the financial plan.
The Central Bank warns that revolving credit on credit cards in Brazil has an average rate of more than 300% per year.
Therefore, avoiding emergency debt becomes essential to maintaining financial health throughout the holidays.
7. Use Goals and Track Financial Planning for the Holidays
Set goals for each category and track your spending weekly. This allows you to adjust your budget if any item exceeds your budget, helping to avoid surprises.
Nowadays, financial management apps like GuiaBolso, Organizze, and Mobills make monitoring easier and keep you on track.
According to research by FGV, the use of financial applications has grown 15% in recent years in Brazil, especially among people who want greater control over their budget.
These tools allow you to create alerts, record expenses, and check your available balance in real time, all to ensure your holiday financial planning is maintained.
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Conclusion
Effective holiday financial planning is key to enjoying the festive season without compromising your financial stability.
This process involves discipline, anticipation and conscious choices, but the benefits are immense.
By following these seven steps, you'll ensure that the festivities don't negatively impact your family budget and start the next year with financial peace of mind.
After all, the purpose of holiday financial planning is to allow you to enjoy the company of your loved ones and celebrate with peace of mind, without the burden of financial worries for the coming year.
