Budgeting For Christmas And Holiday Season

BUDGETING FOR CHRISTMAS AND HOLIDAY SEASONBudgeting is important, not only during the Holiday Season but during the entire year because unless you are properly recording your finances, you may not be distributing such finances to their best or most efficient uses.

The first step in Budgeting is to write down your Gross Income, whether it is from Employment, or other forms of Income such as Social Security, Pension, or other Benefits.  If you receive Income primarily from Employment, then first look at what deductions are made from your paycheck before you receive the net amount after such deductions, which is commonly described as take-home pay.

Many Clients over the years when asked what they make, will often say they take-home x amount of dollars.  They do not think about what the Gross Amount of dollars they earn from their labors, but rather the Net Amount of dollars they actually “take home”.

Look at your paycheck and the deductions made from your paycheck.  Are you deducting too much money for taxes?  Many Clients will have a large amount of federal taxes deducted from their paycheck, with the thought that they will receive a larger refund at the end of the year.  Often, this is how many Clients budget their monies for the Holidays and other events that require larger expenditures of finances.

However, when you under represent deductions that you may be entitled, and excise a large amount of deductions through federal taxes from your paycheck, you are essentially giving an interest free loan to the federal government throughout the fiscal or tax year.

You would be better served by receiving a larger paycheck throughout the fiscal year and no tax return at the end of the year.  Such monies could be better utilized during the fiscal year to your own benefit.  Even at the low interest rates that banks pay currently, you will have the benefit of making a small amount of interest if you invest that money into a bank account versus receiving no interest by the federal government giving you back your money at the end of the year.

There may be other deductions from your paycheck that you don’t even know about.  Some employees will have funds taken from their paycheck for such things as Life Insurance, Disability Insurance or other deductions.  Such deductions might only be $10, $20 or $30 dollars a week but over the course of a year, such deductions amount to $520, $1,040 and $1560.  Doesn’t sound like a little bit of money know, does it?  Question whether any of these or other deductions from your Gross Wages are beneficial, and whether such monies could be used more productively towards other things.

Next week we will discuss various other tips for budgeting during the Christmas and Holiday, and by extension, the remainder of the year.

Jay Weller is a Bankruptcy Attorney in Clearwater, Florida.  Weller Legal Group has Offices in Clearwater, Port Richey and Lakeland, Florida.  The Bankruptcy Attorneys and Lawyers at Weller Legal Group are knowledgeable and experienced in all aspects relating to Debt, including Budgeting, Bankruptcy, Credit Counseling, Settlements, Foreclosure Defense, Loan Modifications, and other Debt related matters.  If you are in Debt, please contact us through our website at www.jayweller.com or Call directly to speak with an actual Bankruptcy Attorney or Bankruptcy Lawyer, at 727-539-7701 or Toll Free at 1-800-407-3328 (DEBT).  Merry Christmas and Happy Holidays!

Image credit: Burmakin Andrey