How To Keep Clients From Breaking The Bank During The Holidays

The holidays are a stressful time for people … and their wallets.

In fact, the average consumer will drop $1,048 on holiday gifts and decorations in 2019, the National Retail Federation says.

To keep clients on track, advisors will need to plan ahead and encourage creativity.

Save Ahead

It’s never too early to start saving for next year. In anticipation of the holidays, help clients save more ahead of time so that they aren’t putting holiday shopping and expenditures on their credit cards.

“I encourage clients to have a plan for who they are buying for, what’s that dollar amount, what will be purchased and for how much, as the next step. Then I suggest using an app, a spreadsheet or another method to track their progress towards that goal to keep then on track with their spending. And we check in on that - it’s an accountability point,” Michelle Buonincontri of Anthem, Ariz. said.

To calculate what a client should save up for the holidays, added up the anticipated cost of food and drinks, decorations, gifts and other expenses and then divide that number by 12 to see what clients should be saving each month for the approaching holidays. Share the formula with them so they, too, can pass it on to others.

Glenn Downing of Cameron-Downing in Miami said there are additional advantages of saving the rest of the year for the holidays.

“Say in July you see the perfect gift for someone on your list, at a deeply discounted price. You can buy it since you already have 6 months' of holiday expenses saved!” he said.

Earn Extra

If your client is a big holiday spender, encourage them to pick up a side hustle, Bounincontri said. “Picking up extra cash with a side hustle like Uber, Lyft or door dash can create extra cash flow to offset holiday spending to limit or eliminate credit card spending and the after-holiday credit card blues.”

Bounincontri says that in addition to earning extra, help clients save extra.

“Encourage folks to utilize things like free shipping, buying gifts with reward points, and utilizing Black Friday sales to reduce the holiday expense budget,” she said.

Get Creative

Matthew Gaffey of Potomac Falls, V.A. tells his clients to get creative for the holidays.

“Make a game of it,” Gaffey said. “Set a low budget (or even more reasonable budget), establish the rules of the game, and get creative. If you had $20-$30 and you had to pick out three things that reminded you of your spouse, what would they be? This will set limits on your spending and allow you to focus more on the "why" you're spending the holiday together than what you're buying for one another.”

Getting crafty also has its perks – one-of-a-kind gifts. These can be especially memorable for the recipient because of their uniqueness.

“Don’t overlook intangible gifts,” said Kristin Pugh of True Wealth in Atlanta. These can be gift certificate like presents such as massages, chores, baby sitting, pet sitting, etc.

Cost-saving Ideas For clients:

• If the client has a large family, suggest secret Santa/white elephant game
• Use apps like Rakuten, Raise, or RetailMeNot to save on purchases
• Purchase gifts as a group or pair
• Purchase one gift that the whole family can enjoy (game, activity, etc.)
• Take advantage of sales, free shipping and other promotional pricing to save money
• Work backward: instruct clients to set a dollar amount and then list who they are buying for and what they are buying, not the other way around.

Advisor Accountability:

• If you have a client that is a big spender, establish spending rules well in advance of holiday shopping.
  • Number of gifts/person limits
  • Cost/person limit
  • Overall spending limitations
• Hold your client’s accountable. If they do overspend, explain how that will impact their financial picture.
  • Use apps and other tech to track holiday related spending (there are several out there).

AdvisorNews Managing Editor Cassie Miller may be reached at cassie.miller@Adnewsfeedback.com. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.