Time to Prepare for Financial Winter

The holidays have always been more about family, faith, and giving than spending money which is good because people should be spending less this holiday season. If you’re trying to figure out what to buy for people this holiday season, make the smart move and conserve your financial resources for the coming financial winter.

Things are about to get a lot worse in the American economy, so give yourself a gift this holiday season and focus on building up your financial reserves instead of drawing them down. Employers are likely to start handing out pink slips in the new year at the same time that people are getting their credit card statements. Hopefully you won’t be one of the chosen few, but if you are you are, then you will be much happier if spent conservatively during the holidays.

The economy is going to inevitably slow because the housing piggy banks that consumers have relied on the past year or two to finance their lavish spending, are crumbling and the tightening of credit is about to spread beyond the housing market to auto loans and even credit cards. Tightening credit means decreased consumer spending, and decreased consumer spending will mean layoffs. At the same time, spiking commodity prices will push prices higher and leave consumers with less money to spend after they buy essentials like food and fuel and service their growing debt.

At the same time, the economy faces new risks as the falling dollar is in danger of spooking individual and institutional investors from overseas, potentially adding downward momentum to securities prices and upward pressure on interest rates.

I hope I am wrong, and that the inevitable financial winter isn’t finally arriving on the backs of the tapped-out American consumer, but it still wouldn’t hurt to make sure you have four to six months of expenses saved up in case the person who is laid off happens to be you.

So this holiday season, think about what the true meaning of the holidays are before you reach for your wallet and buy stuff that may become a burden in the new year.

Careful shopping!

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Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies use Human-Centered Change™ to beat the 70% change failure rate. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.

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