The time has come (really)

Posted: Sep 06, 2006 7:30 AM

Now that Labor Day is over, the holiday season is going into full swing. How do I know? Before leaving my house at the lake where we spent the holiday weekend, I received notice of the date of the tree lighting ceremony: November 24th. What happened to Halloween? And that other holiday, Thanksgiving? Be prepared -- they are coming at us with both barrels loaded.

Why should you or I care about the fact that the Holiday Season is starting 2 to 3 months early? We need to keep our resistance up that much longer, or face the fact that the first quarter or even the first and second quarters of next year are going to be painful.

At this point, I need to always mention that emails will arrive lecturing me about the evils of not paying cash for everything. I understand that point of view, but when you are used to buying with credit and disposing of the balance each and every month, it becomes redundant. But then, how many people actually do that: get rid of the balance each and every month?

Therein lies the problem: relying on credit cards to celebrate your holidays in style.

Credit cards, aka the world's most expensive revolving debt, will enhance your holidays and slaughter your new year. There isn't a reason in the world to do this again this year. You may have acted this way in the past, but if you take a moment to analyze your action, you will realize how costly it is to act this way.

Why not use the early start to do it right this year? Set a budget and even if you are unable to stick to it, you will have some measurement to work with for subsequent years. Figure out how you are going to fund your budget. Will you do it with cash flow, savings, sale of assets or even the financing of assets? A budget is great, but without a funding source it is meaningless.

Fund your budget early. This will accomplish several things for you, including diluting your desire to buy as much as you had planned. Once the money goes from your safe keeping to the launching pad, a sense of loss may prevail that can save you thousands of dollars. Even if you do end up spending it all, you will tend to build a good pattern for yourself for years to come.

The Holiday Season is not a surprise to anyone. It always comes at the end of each year, yet so many people are "unprepared" for the realities of the season. It is nice to go to grandma's house, over the fields or in fact any way you can get there, but unless you are walking it isn't free. In fact, depending where grandma lives, it can be darn expensive. Start early in January and begin the preparation for the joyous season ahead. If you do that, it probably will be the joyous season ahead, instead of one with anxiety, frustration and downright hopelessness.

Wouldn't it be nice to actually have a new year, instead of the same old year with a different date? If you are one who carefully builds reserves, who takes pride in setting enough aside to weather any storm, you probably have been bored with this entire piece. If you are getting set to become one those people, hopefully this article will give you the impetus. In either case, may I be the first to wish you "Happy Holidays"!

Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom. Roger is the President and founder of Manhattan West Mortgage.