Your Finance Travel Buddy presents One Simple Step

Happy Sunday fellow Financial Freedom Seeker

Mindset Moment

One Simple Step

The definition of opportunity cost is

“the loss of other alternatives when one alternative is chosen”

In monetary terms, this is where when you spend money on one thing, it means you can’t spend that money on something else. So, you are giving up the other things you could spend that money on.

This concept is very important when it comes to spending. You need to decide what your priorities are and spend accordingly. 

This is especially true when it comes to Christmas gifts. For each person you’re giving gifts to, you need to prioritise what type of gifts you want to spend your money on.  Your One Simple Step this week is…

To decide where your spending priorities lie when it comes to Christmas gifts

Why is this important?

Christmas is an expensive time of the year that involves giving gifts to family and friends. It can quickly get out of hand (especially when you have children). So this is the perfect opportunity to think about what your priorities are with regards to spending.

How do I implement this?

1. List out the people you need / want to give Christmas gifts to

This is a good first step as it helps you plan for the number of gifts you need to get and the overall spending 

2. Think about what kinds of gifts you want to get them

For each person on your list think about what you want to get them, what they would like, and what your budget is 

💡Top tip: my husband and I value experiences over material possessions. We also love traveling, so our big Christmas gift to each other each year is flights for a weekend away. This has a budget of £125 to manage our spending. It’s worth having conversations with your loved ones about what they want and what your gifting budget is – especially with partners you share finances with.   

Watch this reel on ideas for low cost Christmas gifts

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Have a fabulous week ahead!

Until next week

Pernia | Your Finance Travel Buddy