There are lots of special occasions to celebrate every year. Specifically, birthdays, holidays, and vacations. How do you manage the gift and card buying? When do you do the shopping? How do you do that shopping? How much money do you set aside for each person or occasion? How do you remember to budget for these occasions? What is your budget strategy?
Birthdays are one of the best occasions to party. It’s an opportunity to celebrate someone’s life while they are still alive. Some of the best parties I’ve ever been to, were birthday parties. I recall one surprise birthday party thrown by my brother when I turned 29. My brother had worked with my parents to make the arrangements for food and beverage. They invited the people, created a plan for me to arrive at the house with the attendees awaiting to surprise me. They even asked attendees to arrive early and park around the corner so I wouldn’t notice them all as my mom and I drove up to the house. My brother rented a Hummer, H3, and took me for a spin around the neighborhood in it. I felt so special that day!
Now it’s my brother’s turn. He turns 40 today and we’re celebrating him with a small gathering on Memorial Day. It will include lots of food and beverage, close family and some extra fun surprises because turning 40 can’t be just another birthday.
I went to Party City to purchase some items to honor my brother's birthday. I bought things like themed dessert plates, napkins, balloons, a 40th Kit, candles, wrapping paper, a banner, and some latex balloons. Suddenly, I realized that I was spending upwards of $70 for all of this. As a former boss said, “fail to plan, plan to fail.” I should have ordered most of this online. I could’ve purchased all these things for much less had I planned better. But now, it was crunch time and I “needed” to have them in hand immediately.
Sometimes it’s hard to track birthdays in terms of how we budget. Clients ask me if they should budget for the month or in advance. The answer to that question really depends on the client’s financial capacity to save in advance and the amount required for each occasion. Significant birthdays can be especially challenging to plan for. When I say significant, I mean Sweet 16, 21, and every birthday thereafter ending in a "0!" There can be lots of unexpected expenses around these celebrations. It helps to have a specific budgeting tool that allows ease in preparing for the occasions.
For example, if your parent is turning 70 years old and you want to host a small dinner party at a local restaurant. You also want to pay for the party. You may not be able to cash flow the entire gift of hosting within the actual month of the event. Also, you may need to order (and pay for) decorations, a cake, or other items in advance.
What about holidays? How do you spend your holiday? Let’s specifically talk about the upcoming holidays, like Memorial Day, 4th of July and Labor Day. Will you be camping or be out of town? Will you be going to someone’s cabin and need to take some extra food and beverages? Will you need to purchase some water toys, goggles, a new swimsuit, or sunscreen? (Yes, this is my favorite sunscreen!) Will you be hosting a barbecue of your own? With the rising costs of literally everything…how do you best plan and budget for these?
All of these “extras” have had a significant impact on our personal budget this month. We are spending about 17% more than we were spending this time last year. We are hosting more get togethers, buying more food and replacing outdoor items that are used during the summer season.
With school ending within the next few weeks, the summer vacations will begin. What are you planning? When did you make reservations? What expenses will come up for the actual vacation? What summer camps will your kids be going to? What will you need to purchase to prepare them for that? Sleeping bags, lanterns, flashlights, but spray, etc.
This is the nerd talking now. We actually have vacation budgets too. We predict the amount of money required for transportation, food, sight-seeing, adventures, and lodging. I recall one trip to Hawaii where at the end of each day I would tally up our expenses to have a real-time view of where we were in terms of staying within our budget. I know, super romantic!
Birthdays, holidays, and vacations can really impact the budget if we aren’t intentional about planning for them. Birthdays and holidays are not surprises, right? We can plan for them. I’ll share a tool that I’ve used to keep us on track. I also recommend this tool to my clients. Basically, you look at the calendar and you create a document that has subheadings for each month. Under each month you write down the birthdays, holidays, and special occasions that you will be celebrating. When you have your monthly budget meeting, you will review this document to ensure that you're budgeting appropriately for the upcoming month and occasions.
For example, May is a super busy month for many of my clients. Between birthdays, Mother’s Day, and Memorial Day, the budget can become busted quite easily. But when clients have their budget meeting at the end of the month, (April in this example) they look at their sheet for May and see those birthdays and holidays and plan accordingly. They might also be putting away some money for future birthdays or vacations. It takes the guess work and surprise out of the ways that you want to be generous and how you want to show up during those special occasions.
Here's a template of the tool that I encourage clients to use.
If you want some help with this or planning for other upcoming special occasions like weddings and anniversary parties, let me know.
When we don't plan for these types of occasions not only can we overspend or incur debt, but we also can feel shameful or guilty for the amount that was spent and not planned. My hope for you is that all birthdays, holidays and vacations are a blessing to you and your family, not a burden.
Have a safe Memorial Day weekend.