Many of us are probably right now in full swing when it comes to holiday shopping. Our first and second year medical students are focused on finishing out the semester with finals looming in the next couple of weeks so shopping is not on their radar. One the other hand, our third and fourth year medical students have more time on their hands. So, perhaps, it is timely to write about holiday spending in general and how to survive without getting into too much debt.
I am under the opinion that the holidays are for kids. There is no doubt that holidays are fun and it wakes up the kids in all of us. This is a very cool thing until you get to the money part. We can all agree that children don’t know how to handle money very well. In some ways, you can probably say the same thing about medical students. As children are considered impulsive, we can say that when we were in college, we were just as impulsive enjoying being kids and all of that, during the holidays. While we enjoyed the holidays and acting like kids, we have to be grownups when it comes to money.
So, how do you prioritize shopping for your people? I’d say make a list of the people you want to spend money on for the holidays. Who is the most important person on your list? Making a plan is important so that you lay everything out. Remember, Santa Claus made a list and he even checked it twice. So, here is my tip. I recommend that you do the same. Get an envelope and on the front of the envelope write the names of all of people you will be buying for and how much money you will be spending for each people. You total the number and this is your holiday budget. You take cash and place it in the envelope to equal the amount of your budget. That, my friends, is your walking around holiday money. When the envelope is empty, it is time to stop shopping and go home. Doing it this way can be challenging, but fun at the same time.
Is there a way to use credit cards and us them responsibly during the holidays? If you ask me, it is like carry around a loaded gun in your pocket and can go off, wounding something permanently. We certainly do not want to permanently damage your financial situation. We are talking about avoiding impulse and having a plan and the credit card is the opposite of that spectrum. It is like saying go screw the rest of your life financially by being impulsive. This may sound harsh, but it is that time of the year where being harsh is the best way to get your point across.
For a large portion of consumers, credit cards cause trouble. That may not be a reason to avoid credit cards entirely, as consumers can learn how to use credit cards effectively. Those of us who do believe we use cash back credit cards responsibly, paying bills in full every month, never paying interest, and buying only what we can afford, are relatively comfortable with the use of this tool, but even the best of us are subject to issuers’ traps. The process of taking cash out of your envelope and handing that money to another person is a very deliberate activity, both physically and mentally. Parting with cash has psychological ramifications. In most people, particularly those who best understand the value of having money saved; the act of giving the cash away triggers the same reaction as a painful activity. Spending money and pain are linked in the brain.
So, what if I followed the advice in this blog and you didn’t quite meet the challenge and you did not do so well with your budget? Can you recover heading into the New Year? Well, like anything, anytime you make a mess, you have to assess the size of that mess and develop a plan for cleaning it up. Right! So, if you wake up with a financial hang over because you weren’t responsible, well, I guess that makes you an American. But, that is not a plan. Now, you have to do the reverse and live on beans and rice or potatoes and maybe take some of those presents back.
Does it have to be about money for the holidays? Remember in the olden days when doing a favor was what people did for the holidays. Particularly, when broke (medical) students do not have much money and so they don’t have it to spend. This is probably more the case, then not. So, one idea is recapturing some of those old ideals. Get off the internet a certificate design that you can put on a document and fill in the document with a favor or promise to do something. For example, walk the dog while on your break or clean the gutters or cook a meal once or twice. Just think of something nice that you can do without having to spend money, but instead spend time. This can show the person receiving your favor your true love for them instead of a plastic item from the mall or local retailer.
If a favor or promise is not in the cards, the bottom line is that you shop smart. Have a plan.
The views expressed in this content represent the perspective and opinions of the author and may or may not represent the position of Indiana University School of Medicine.
Jose Rivera Espada is the director of financial aid at IU School of Medicine, a nine-campus allopathic medical school in Indiana. Jose’s experience includes working as an assistant director of financial aid at Butler University and a financial aid coun...