Create a plan to avoid financial stress this holiday season

Creating a written plan - and sticking to it - is a surefire way to beat financial stress this holiday season.

With the average American spending $700 on gifts this year, according to the National Retail Federation, the holidays have a tendency to stretch people thin when it comes to money. Paul Katsion, a financial services professional in Mt. Pleasant with New York Life, said having a written financial plan is the best way to avoid overspending.

'It helps us from getting caught up in ‘the greatest deal ever,'” Katison said. 'You see a Black Friday special and say, ‘I'm going to buy those and give them to all my relatives.' The value for that product might be the greatest deal ever, but if it overshoots your written plan, it's suddenly not the greatest deal ever.”

Katison said that while working with a written plan may seem restrictive, it actually gives people 'real freedom” to know where they are spending their money and how much they can spend.

A written plan creates a picture moving forward. It can also be a valuable tool in looking in the rearview mirror and knowing where money is being spent on a monthly basis. It's a way to stay accountable for where your money is going.

'Take the reverse look and maybe we surprise ourselves,” Katison said. 'Did I spend that much eating out? That much on my own clothes or gas for my car? If somebody did incur debt or extend themselves credit through the season to buy gifts, then they know where they can make cuts.”

However, Katison said to be wary of depending on credit cards during the holidays. While some people may depend in Christmas bonuses or tax returns next year to pay off debt, they are most likely charging more to their credit card than they get back.

'The farther away you can get away from any credit card spending the better because you're just losing your money through interest,” Katison said.

Just like people resolve to get in shape or diet in the new year, the same thing happens with our finances, Katison said.

'We say that in 2019 things are going to be so much better. A written plan is something I can go back to, I can compare and not beat myself up too badly over if it wasn't perfect that first month, but I am closer to the plan I want to have,” Katison said.

While people tend to have more financial obligations during the holidays including gift exchanges and parties, Katison said he sincerely believes spending time with people and giving to relationships is more important than any other gift.

'If I invite people over to my home during this Christmas season, they want my time more than they want something to put on their Instagram of beautiful hors d'oeuvres we served or decorations I have in my home,” Katison said. 'I want to be in those relationships, it's my intention to give to those relationships first.”

As a financial adviser, Katison said he is often traveling to clients in Burlington, Ottumwa and Cedar Rapids, spending a lot of money on gas monthly. Instead, he could look over his client schedule and schedule appointments closer together to make fewer trips back and forth, Katison said.

Katison also spends money going to lunch with clients. Instead, he said he could eat lunch at home and go out with clients to coffee to save a few dollars.

'If I know where I can make some cuts and avoid spending, I can make those cuts in January to pay off any immediate debts I may have incurred (during the holiday season),” Katison said.

Regardless of your finances, Katison advices to not give up and set attainable goals.

Katison's advice is intended as general counsel, and he suggests consulting with a financial professional.