Why These Money Tips Should be Part of your 2019

A big question you’ll ask yourself after the holidays often is met with mixed responses.

Did you spend too much over the holidays? If that answer is “yes,” chances are you’re quick to follow up that question with another one, that is somewhat rhetorical and defeating in nature.

How do you start recovering from all that spending?

Before getting into the specifics of Thanksgiving Weekend that included the Black Friday and Cyber Monday shopping days, the outlook for the entirety of the holiday spending is on the rise, and will eclipse $1,000 per person on average in 2018, when it’s all said and done.

Sales, overall, are expected to finish at about 5.5 percent higher than what they were in totality in comparison to 2017, with a total spending tab of about 721 billion dollars; the average amount spent is expected to climb to $1,007.24, up 4 percent versus last year and most of that ($638) going toward gifts for all of your friends and family alike.^[1]

Let’s not forget about, too, the ancillary expenses that are more than just the gifts, including hundreds spent on decorations, food and other holiday-related items.

Then, you had the event that was Thanksgiving, Black Friday and Cyber Monday, collectively known as Thanksgiving Weekend.

The five-day period of time between Thanksgiving, including the weekend and culminating on Cyber Monday, saw consumers come out in droves and while the numbers were less in terms of total people, and average amounts, the spending still set records.

Roughly 165 million people shopped over Thanksgiving Weekend, down from 174 million last year, but the bill of sale was higher than 2017 with the average of about $313, down from $335 per person.^[2]

Black Friday hit a record high with more 6 billion dollars in online sales, with 2 billion coming from smart phone buyers only, and a 23 percent increase from last year, and Cyber Monday scored as the biggest shopping day of all time with nearly 8 billion in online sales, up nearly 20 percent from last year.^[3]

For consumers, shopping has turned into more of an online pipeline to spending versus the traditional Black Friday doorbuster deals we’ve come to expect, with sales dipping in the actual stores themselves.

But when you turn your attention away from the holidays and toward your finances, specifically changes or alterations that need to be made in 2019, you have to consider the impact of holiday shopping, the thousands spent potentially and how that will influence where you go from here, post-holiday.

Keep in mind that while the total amount spent per person was down over Thanksgiving Weekend, retailers are keen on the idea that Black Friday-type sales and Cyber Monday-like events aren’t just a one-off or a once in a lifetime discount barrage that they once were.

Retailers, take Amazon for instance, are starting to not only hype savings for Black Friday and Cyber Monday events but also turning the marketing into Cyber Week, for example in Amazon’s case, or retailers using catch phrases that talk about Black Friday Part 2 or some sort of rhetoric that says savings are consistently offered during the entire month of December.

That has led to not only overspending but procrastination among shoppers. About 20 percent

of shoppers wait until the very last minute to shop, with more of them apt to use mobile devices to order (88 percent).^[4]

Studies have shown that mobile devices are good and bad as far as convenience shopper for the former, but easier to overspend and add to your “cart” without thinking too much about the buy.

Furthermore and finally, most Americans find themselves in holiday debt with 56 percent of them adding credit card debt (circa 2016 versus the 2015 holiday season, which saw only 48 percent add debt).^[5]

Re-evaluate Budget: Just because you have one doesn’t mean it works

We talk about holiday debt as if it’s a first-time occurrence but the fact of the matter is debt is running rampant, and most everyone is in it, in some form or fashion.

A lot of what plagues individuals from a debt perspective is simply living far beyond your means and thus having to spend money on what you really don’t need.

That leads to debt and then subsequently a lack of management of it as a result.

Eight percent of Baby Boomers have debt, and that number is basically the same for Generation X and nearly 82 percent for Millennials, with about $5,000 per credit card and $7,000 for Baby Boomers and more than $8,000 for Gen Xers.^[6]

You can argue those numbers happen because of wages being stale, but the fact remains that wants overtake needs, you live beyond your means, and that is what is causing you to buy or revel in what you don’t need, plain and simple.

Only about 1 in every 3 people plan a household budget, and that 33 percent point hasn’t changed much in recent years, quite frankly.^[7]

The disconnect seems obvious when you consider a budget that is non-existent (or even one that is there but lacking) and the propensity to spend more than you have.

What needs to happen in 2019 is a detailed budget process, one that includes big-ticket and smaller expenses, along with trying to find a way to minimize expenses or eliminate them altogether.

If you’re not checking for better pricing, better rates or something that has the word “better” in front of it, then you’re not doing your due diligence to save.

Finally, part of budget re-evaluation has to center on income, too. Living paycheck to paycheck isn’t going to get you very far, so picking up extra income from a side job might be a short-term solution to get out of debt and then go back to your regularly scheduled 40 hours of work per week.

Eliminate unnecessary expenses: Cable, phone bills and other costs can simply go

Shopping around is something that you may or may not have done during the holidays, and if you didn’t look for better pricing, you most likely overspent and blew that Christmas budget out of the proverbial water.

The calendar changes to 2019 soon, and that means you can take stock in what you’re spending your hard-earned money on, whether it’s a ballooning cable bill, cell phone charges that are nothing short of outrageous or those seven gym memberships you’re paying for, and using one (if that).

Part of the budgeting process that lacks for some is, aside from not having one, is not developing it as time goes on or trying to fine tune it.

If nothing else, you should be following the simplest of expense rules as it relates to budgeting: the 50/30/20 rule that says expenses that would be considered “needs” (not cable or pampering appointment) should be about 50 percent of your budget, with 30 percent being for spending and 20 percent put into the bank.

Without picking too much on cable, consider that the average cable bill is around $85 and satellite at $100.^[8]

Just eliminating that expenses and cutting your cost to a low-cost internet provider and streaming saves you thousands each year.

Make saving automatic: This is easiest, yet hardest, to accomplish

Those who are adept at saving money do so as if it’s as easy as riding a bicycle or brushing their teeth: they don’t think about it.

Far too often, saving money is seen as this immense chore that you want zero part of, when all it takes is a budgeting tweak, a few cut expenses and taking the leftover and putting it automatically into a separate account so you can start saving.

With that separate account, you can take a pay off debt with it or have it as part of an ongoing nest egg. When you consider that 28 percent of most debt is that of credit card variety and 42 percent of debt come from student loans, you can see why you’d be eager to get that off your financial resume.^[9]

Automating savings allows you to forget about where the money is going in the sense that you won’t be tempted to spend it. If you leave it alone and let it compile, paying off debt is just one example of how you can use that money for the greater good.

Consider, too, that saving money can’t be left up to the average person to do on their own.

As disappointing as that is, consider that those born between the year 1981-1998 (Millennials) have only about $2,430 median amount saved, while even Gen X, born between 1965 and 1980 only have median amount saved of around $15,000, with the real kicker being that about 30 percent of all households surveyed have less than $1,000 on hand in the event of an emergency.^[10]

That $1,000 club isn’t much to brag about since that isn’t going to do much to pay off average amounts of debt, much less buy a set of 4 tires or even a handyman for the day, not even considering major events or costs that you could incur.

If we’re not doing a good job saving on our own, as is clearly obvious, set it to deposit into a savings account and then walk away from it, only to return if paying off debt is your main concern.

When you talk about the holidays, and then the would-be New Year’s Resolution regarding saving money, the irony is about as thick as the egg nog.

You spend thousands potentially during the holidays and without a few days are fretting about spending that has already transpired, and immediately search for answers or do a shoulder shrug or head shake at how much you actually spent, as if it some sort of surprise that the total figure is so alarming.

About 65 percent of those who added debt to their holiday plan didn’t have any plans to do so, and they’ll spend about 4 to 6 months trying to pay off the debt as a result, with 27 percent finding that five months seems to be the most common place consumers land.^[11]

That certainly puts you behind the proverbial eight ball when it comes to how 2019 is going to play out, but reassessing your finances, developing a new budget and starting to look at expense you can cut right away are really important parts of how you’ll want to tackle money next year, and put yourself in a better position come the 2019 holidays, where maybe the Christmas miracle that happens is you’ve done enough to manage your money all year that debt is nothing more than white noise during the forthcoming holiday season.