The bills from Christmas are finally rolling in and the damage is pretty severe.  We managed to spend my entire Christmas Fund, including my bonus, plus a lot more.  We managed to do that without even traveling, which we nearly always do during the Holiday season.

I’m still tallying up how this huge overspending failure has affected my net worth - I’ll have that up on the first or second of January.  But my question is simple at this point -

What went wrong?

My wife and I spent too much on each other, as usual.  We generally get each other fairly expensive gifts during the holidays, but this year we probably went a little bit too far.  We also spent far, far too much on our son.  Yes we only have one, but how many gifts does an 8 year old really need?  In addition, we decided to buy a fairly large denomination gift card for my sister, as she’s been struggling financially in a pretty bad way.  I don’t feel bad about that, since we’re far better off in the money world than she is, and she has two children to care for.

What can I do about it?

Fortunately I don’t have to carry the credit card balance and accrue interest.  Unfortunately I do have to raid the savings account ( actually a money market account ) to pay off the bill.  I don’t have enough sitting in our checking account to cover it and the other bills.  That’s a real disappointment for me, especially since I had to “borrow” $1,000 from the same savings account last month.  I’m living beyond my means, and my savings is shrinking before my eyes.  This is not the path I want to go down again.

The Plan

A weekly budget review is in order, no matter how boring and distasteful it is.  My wife and I will sit down every week and analyze our purchases, and see how far off from our budget we are.  Rather than a big surprise at the end of the month, we can focus on making adjustments along the way.  There’s simply no reason for our Visa bill to be thousands of dollars higher than budgeted - even at Christmas time.  A budget is made to keep finances in line, and I need to learn to stick to it.  “No” is not a bad word, and I will stop treating it that way.

Popularity: 20% [?]