Air Force photograph by Staff Sgt. Grace Lee

An Airman calculates his budget for the year using the “70-20-10” rule as a guideline Dec. 12, 2016, at Luke Air Force Base, Ariz. In addition to having trained financial counselors, A&FRC has free publications, guides, classes and other resources to answer questions concerning finance. The A&FRC also provides one-on-one financial guidance appointments. For more information, call A&FRC at 623-856-6550.

Every year nearly 300 million Americans celebrate Christmas which entails not only spreading holiday cheer, but buying gifts for loved ones. While gift giving can be rewarding, the result can leave some financially unfit for the new year.

“For many, purchasing Christmas presents is a large, added expense that most are typically not used to,” said Allyson Dennen, 56th Force Support Squadron Airman and Family Readiness Center personal financial counselor. “Failing to plan ahead can result in credit card debt or using money that’s been set aside for gifts.”

Dennen advises Thunderbolts to avoid last minute purchases and unplanned spending to stay on track.
“Just as the old adage goes, ‘If you fail to plan, you’re planning to fail,’” said Cory Carmichael, 56th FSS A&FRC community readiness specialist. “I believe that because we know when the holidays are approaching, why not plan ahead for that? A lot of times people get emotionally involved and start spending more than they originally planned which results in what I refer to as a ‘holiday hangover,’ where one is left with a feeling of regret and is overburdened by the bills that come afterward.”

Preparing in advance is important to staying debt free and having money for essential needs.

“One of my favorite tips I share with clients is to lay out their extra expenses in the beginning of the year which includes holidays, birthdays, car repair expenses and more,” Dennen said. “I would recommend writing down how much you expect to pay every month of the year, adding it up together and dividing it by 12 to get the average amount. Thereafter, set aside the amount calculated every month to ensure you have enough money for not just the holidays but other expenses throughout the year.”

Additionally, Dennen recommends using the “70-20-10” rule as a guideline to calculate how much money should be set aside per category.

“Your day-to-day expenses should be no more than 70 percent, which includes rent, food, clothing, etc.,” Dennen said. “The 20 percent stands for debt like student loans, car payments and more. The 10 percent would go toward savings which can be for your retirement, emergencies or specific goals such as a car, a new computer and more.”

Although it’s common for many to fall under social pressures to buy gifts one can’t afford, gift giving isn’t always necessary for spreading holiday cheer.

“If you have a large family or family members who expect gifts from you, you have to know where your boundaries lie and be able to say if you don’t have money to spend on gifts,” Dennen said. “You don’t always need to use money to show your loved ones you care. You can get creative with it and make them a coupon for a free hug or clip coupons for their favorite restaurant and more.”

For those who need financial guidance, the financial counselors at the A&FRC are here to help.

“Live within your means, know where your money’s going and plan for the future,” Carmichael said. “If you want to get a jump-start on your finances for the new year, come see us and we’ll be happy to help.”

In addition to having trained financial counselors, A&FRC has free publications, guides, classes and other resources to answer questions concerning finance. The A&FRC also provides one-on-one financial guidance appointments. For more information, call A&FRC at 623-856-6550.