Smart Money Management During the Holiday Season

[00:00:00] Paula: Hello, everyone. I am Paula Okonneh, host of Chatting with the Experts, the TV show that spotlights the professional journey of immigrant women from Africa and the Caribbean, and sometimes their daughters or granddaughters, that have excelled in North America, in Europe, in the UK, or even as far as… Australia.
[00:01:02] Paula: Join me every week as I engage with these accomplished women and their descendants offering insights, knowledge, and expertise that educate and inspire women worldwide. My guest today is Carolina Aponte. Let me tell you about Carolina. She is an award winning author. She’s an entrepreneur and motivational speaker committed to empowering individuals to achieve their full potential.
[00:01:36] Paula: Originally from Margarita Island, Venezuela, Carolina migrated to the United States in her early 20s without a high school diploma and subsequently earned her bachelor’s degree from Nova Southeastern University. Through her varied experiences across different industries, she went ahead to found Caja Holdings, which is a successful accounting firm specializing in back office and fractional CFO services.
[00:02:08] Carolina: Hi, Paula. Thank you for inviting me. This is great.
[00:02:11] Paula: Absolutely. Today we’re going to be talking about Holiday financial accountability and you’re going to be giving us tips. So before we go into that, there’s something that you said that really stood out for me and I’m going to read that you said being accountable during the upcoming holidays is crucial to maintaining your financial stability and ensuring you’re prepared for any expenses of financial obligations that may arise.
[00:02:43] Paula: True?
[00:02:43] Carolina: It is. During the holiday seasons, we want to gift all the gifts and then we forget what we should be saving the money for or what has already been allocated for and so we get derailed financially and comes January, we’ll feel the stress of having to come up with money to pay for all those gifts and then we can’t reach our financial goals.
[00:03:07] Carolina: So creating, a plan before you start holiday shopping makes a lot of financial sense.
[00:03:16] Paula: Yes, and that’s why we decided to do that now. It’s November and someone may say, but we’ve got six weeks to go before the holidays, but you’re an accountant and you said, Nope , let’s start early.
[00:03:29] Carolina: Yeah, because, you walk into the stores right now and then they’re all stacked up. They have all the decorations. They look beautiful. And you start thinking, oh, my God, I want to buy this and I want to buy that. And you start, your mind starts going. And if you don’t have a plan, and you don’t have a process in place, then you get derailed.
[00:03:48] Carolina: And so this is the right time to do it. Not when you’re in it, just like taxes, people wait until March to start, collecting all the information before they go, they do taxes here in the United States, April 15. But here’s the thing, that should have happened all throughout the year, so that by the end of the year, you’re all set and no stress and, know exactly what to expect.
[00:04:10] Carolina: So the same thing has to be with shopping and holidays.
[00:04:16] Paula: So in other words, you’re saying avoid impulse buying because the shops, the stores make you feel like I need this now.
[00:04:25] Carolina: Yeah. And it’s not just impulse buying, which does happen when you go to the store, but guess what?
[00:04:33] Carolina: The apps on your phone. A good advice during the holidays or pre holidays is turn those apps, delete them from your phone. You can add them later, but that way you don’t have that easy access to making the purchase without checking with your budget, making sure that what you’re buying is on your list, which is something that, I recommend people to do is to make a list.
[00:05:01] Carolina: Of who you’re going to gift and what your budget is going to be per gift. So this way, okay, so I’m spending 50 on, on my cousin and I’m spending a $100 on my husband and I’m spending $25 on my friend. Now, you can’t when you’re shopping. You have this list in mind. That you’re going to use in order to make those purchases and you won’t be overspending so that really helps you and then the other aspect of it is; You have it helps you avoid last minute shopping.
[00:05:36] Carolina: Yeah, that’s when they get you that’s how they get you because you gotta buy the gift you’re gonna go to the party and you don’t have the gift and so you end up spending more money than you need to but if you do it starting now. Little by little every week, you buy something according to your budget, then it’s just a breeze and there’s no stress and there’s no overspending.
[00:05:58] Paula: That’s a good point. So you mentioned apps switching those apps off. Any examples of some of those what comes to mind for me is Amazon. I love amazon.
[00:06:08] Carolina: Yeah, exactly. That’s the first one that needs to go right. We’re all a little bit addicted to the to Amazon because they make it so easy. For the next day, but if it’s not on your list, you don’t need to buy it. That’s the bottom line, right? And then you have other apps. You have Target and you have Walmart and you have, Best Buy, all the stores have apps right now. So whatever your preferred store, if you have the app, remove it from the phone. This is going to help you stick to your plan.
[00:06:42] Paula: Alright. Take note, remove those apps. So me. Amazon is going to be uninstalled. Alright. Go ahead.
[00:06:50] Carolina: Then you can just, decide one day that you’re going to go on the website to make the purchases and be done with them instead of going every time on your app and say, Oh, maybe I’ll buy this. Oh, maybe I’ll buy that. No.
[00:07:03] Paula: I love that. So you talked about a budget. Are there any budgeting apps that we should install?
[00:07:09] Carolina: I don’t necessarily have an app that I would recommend because there’s just so many apps for everything, right? But what I would say, the good old paper, pen and paper is a really good start.
[00:07:22] Carolina: I won’t say that’s where you need to stay, but it’s a good start. You grab your list your notepad, and you get your pen and your write First, write the list of people you’re gonna be gifting to, and then on another column you write, how much are you going to be gifting? Add that up now, you have a total to spend and then on a 3rd column is what kind of gift are you going to be giving?
[00:07:45] Carolina: Because that helps you in making the purchase without being impulsive because if you said my mom, I’m going to give her a 100 dollars, but I’m going to buy her some maybe a luxury bath products, or maybe she needs some shoes. So now, when you have that list of the types of items you’re going to buy, then it makes it a lot easier to make the decision and stick to the budget.
[00:08:08] Paula: That’s a good tip. We’re talking about gifts, but there are other things that go along with the holidays. There’s the food, there’s travel,
[00:08:15] Carolina: Yes. So this is why, even before creating that budget, you really need to sit down and review your financial goals, right?
[00:08:24] Carolina: Your financial goals, short term, long term, what do for this year, my budget for the year has been X and we’re now in October, almost November. How much have I spent? How much do I have left? That’s the review that you need to do to see. What do I really have available to spend this year?
[00:08:41] Carolina: And then. If I’m considering doing other things next year in 2024, maybe I want to buy a house. Maybe I want to buy a car. How much money do I need for that? So that I keep on track to achieving those financial goals. And then based on that, you create a budget, right? Because it’s easy to say I think I have 1000 in the bank, but guess what?
[00:09:03] Carolina: You might not necessarily be able to use the thousand dollars because you have other goals in the future, and you’re going to need some of that money for that. So you have to consider the goals in the future before you allocate the money today.
[00:09:18] Paula: I love that because, sometimes, as you say, this is holiday, we’re talking about tips for the holiday, but we’ve got to look beyond the holiday. You may come up with that. You may write down the list of those who you want to give to, then you start thinking, okay, but January is going to come. What’s going to happen next year? Even if it’s not January or February, later on in the year. You need to make sure that there’s money to achieve the other financial goals, which are…
[00:09:40] Carolina: yeah, people get in a lot of financial trouble because they don’t start thinking ahead. They don’t it’s only about this month or next month, but not into the future. And so that it’s what makes it hard to it to achieve certain goals of buying a house or getting a car or maybe, sending your kids to college or, whatever those goals are, or that vacation. Your dream vacation. If you spent all your money now in the holidays, then you won’t be able to go to your dream vacation in Hawaii.
[00:10:10] Paula: Love that, Hawaii is great.
[00:10:12] Carolina: Yes, it is. So it’s about just being mindful of how you allocate your resources, which is money, to make sure that you stick to it and avoid spending it in the wrong places.
[00:10:26] Carolina: And you mentioned something, yes. It’s not just about the gifting, but also the travel. If you’re going to go see family or you wanna spend New Year’s in New York to see the ball drop. Maybe part of the expenses are you have to go to some event and the event is a black tie event and you need outfits and we need the outfit, the shoes the whole the whole thing of getting ourselves made up. You also should account for how much you’re gonna be spending on that. So the holidays can get very expensive because there’s a lot of parties going on, maybe using some of the stuff you haven’t used in a long time. Consider that before spending the money.
[00:11:08] Paula: You’re so right. And, because, this program or this show, we, I’m talking to immigrant women from Africa and the Caribbean, we have cultures too. Food! That’s a big, if you decide to host…
[00:11:20] Carolina: yeah, if you’re going to be host. Maybe you’re going to be hosting your, a holiday event that you’re located at your house.
[00:11:28] Carolina: And we are, yes, our cultures, we got to feed everybody. And we don’t make just a little bit of something. We make a lot of it. And so that costs money, but you have to account for that too.
[00:11:39] Paula: Absolutely. The food costs a lot of money and you’ve got to drive to get some of these things because they’re not always readily available in the cities that we live in, so that needs to be put into consideration.
[00:11:52] Paula: Okay. Alright. What about emergency funds? Can I set up an emergency fund for that?
[00:11:57] Carolina: Of course and not just for the holidays, but also for yourself anyways. 1 of the issues in our specifically in the United States is that there is less and less savings. Per household and what that, what happens with that is that when a situation occurs, then you have to use a credit card or get a loan, which have high interest rates.
[00:12:26] Carolina: By not keeping some savings for as an emergency fund, then you put yourself in a situation where it’s going to cost you more money to take care of the issue. Than, if you had the cash available to cover that incident, or that situation, or emergency, for example, if you’re traveling for the holidays, unless you have an emergency fund in case that the flight get delayed and you have to stay overnight somewhere because the weather conditions and now there’s a whole situation with the airline industry. And so you may need to spend a night or 2, in a different city that you weren’t planning on staying so you need money for that.
[00:13:09] Carolina: And so if you don’t have that emergency fund, it makes it really tough because then guess what you get to sleep in the airport on the floor and be very uncomfortable.
[00:13:17] Paula: And not to talk of unsafe too.
[00:13:20] Carolina: Yeah, exactly. So there’s something to be said to plan for the on unexpected. And that’s what the emergency fund is for is to make sure that if all goes well, that money sitting in your savings, but if something doesn’t go right, you don’t have to stress over the money.
[00:13:37] Paula: We’re talking about savings. This is a good time. Depends on what side of the spectrum you are. So this is a good time to save, because interest rates are high.
[00:13:45] Carolina: Interest rates are high, which, it needed to happen to make the corrections in the economy in the United States. So it’s something that we’re feeling a little bit of the pain, but it was necessary to make sure that we didn’t derail completely.
[00:14:00] Carolina: But in turn now, banks, there are a lot of banks that are offering very high yield interest earnings on your savings. So you can have 5 and a half, 6% earn interest on the money that you have in your savings account. So it helps build that emergency fund. If you put that money aside and make some interest on it.
[00:14:22] Paula: Yeah, because five and a half, six percent. If you have a savings account, I’m talking to the accountant, that’s big.
[00:14:31] Carolina: It’s huge. And we haven’t seen this numbers in years on savings. It’s been very steadily for the last 20 years, like two and a half percent. At 2. 8 percent at most, but five and a half percent? Unheard of.
[00:14:48] Paula: Certainly unheard of and it’s not a CD. This is like your savings account.
[00:14:53] Carolina: Yeah, it’s money that you can have easy access to it if you have an emergency, right? Because the issue with putting money, another issue, but one of the caveats of putting money into maybe a cd, right?
[00:15:04] Carolina: Like you put it in a three month, six month, or a year cd, you can’t get your hands on that money if you have an emergency. Because that money is locked in to earn the interest. But if you have a savings account with a high interest set up, then if you need the money, you can grab it.
[00:15:23] Paula: That’s true. That’s a huge tip because you may make enough interest on whatever money you put in that you can use that interest to buy the gifts as opposed to dipping into, money…
[00:15:33] Carolina: Exactly. And that’s why knowing what your financial goals are, setting up a budget helps you figure out how much do I, can I really, wisely spend during the holidays without actually hurting my bottom line.
[00:15:48] Paula: Yes. Whoa. You said you mentioned the credit card because that’s an easy reach, this is the time is what I’m hearing from you is capitalized on the high interest rates we have now and use cash.
[00:16:01] Carolina: Absolutely. So there are opportunities right now because of the interest rate as well that even credit cards are offering 12 month, zero interest. So if you have a high interest credit card with a balance, you can get an in a credit card with 0 percent interest for a year or a year and a half and you transfer the money into this zero interest.
[00:16:29] Carolina: Not only does it help you save money in terms of the interest that you will be paying here, but it helps you budget and the payments that you make to this new card in a way that you then you don’t have to worry about having a debt. At the end of the 12 months. Pre-allocate the money and then that gets paid off. So it helps you have some cash up-front, but also get rid of debt.
[00:16:55] Paula: Important. Yeah, it’s discipline and planning.
[00:16:59] Carolina: Planning.
[00:16:59] Paula: No emotional spending and you know you’ve given some tips that are really practical that we can use.
[00:17:06] Paula: I love the one with the savings because we keep hearing Americans don’t save or we don’t save, but now, as you said, with the high yield, high interest rates that we can get on savings. Why not do that ?
[00:17:17] Paula: Save.
[00:17:18] Carolina: And here’s the other thing about it Paula. You actually don’t even have to go to a bank to open up that savings account with high interest. Just go online You just go online, you fill up all your information online.
[00:17:34] Carolina: They have a way of, getting you verified for security reasons. You know how to get your identity verified, all electronic so that you don’t even have to leave your house. To make this happen because a lot of times the excuse is well, I don’t have time to go to the bank I’m busy working my schedule doesn’t allow me to take time off my work to go open a bank account because I have to make an appointment and I have to sit there and wait. There’s no excuse.
[00:18:04] Carolina: Everything’s online.
[00:18:05] Paula: Everything’s online and everything’s at our fingertips. When we say online, some people are like computer. No, you can use your phone.
[00:18:13] Carolina: That’s right.
[00:18:14] Paula: I’m going to say…
[00:18:15] Carolina: All the banks have applications. That would be the application that I do recommend you, you get on your phone versus a shopping application.
[00:18:24] Carolina: And here’s 1 of the reasons you want to have your bank application on your phone. It is so that you can monitor your account.
[00:18:34] Paula: Yes.
[00:18:35] Carolina: When you are monitoring both your bank and your credit card accounts, you can quickly identify if there’s been fraud. If there’s an error that has because nothing is perfect and, banks also make mistakes.
[00:18:51] Carolina: if There’s been a mistake in your account, you can quickly see it and make sure that it gets handled right away versus waiting until the end of the month or the next month to look at it. I highly recommend monitoring your accounts on your phone. And the other thing that it does, it keeps you honest on how you’re spending your money, right?
[00:19:13] Carolina: Because if you’re looking at those transactions and you’re like, Oh, I shouldn’t have gone to that restaurant. I should have just cooked at home. And then you see two or three of those transactions. Like I really need to change this one thing. That’s where my money is going. This is where I’m spending the money in the wrong places.
[00:19:30] Carolina: So it serves to monitor to make sure there’s no fraud. And then it also helps you being accountable to yourself.
[00:19:38] Paula: Yes. I love that. Yeah. The real time notifications that come up. As soon as you make a transaction these days with a lot of your credit card, you get a notification, a text message or email immediately, that’s something that brings about accountability because it could be or should be buyers remorse if you’ve overspent, go back.
[00:19:58] Carolina: Yeah, no, but it’s a, it’s perfect getting those notifications, especially if you have other people on your account. So there’s not just your account. Let’s say it’s a child or you have children for example, I have a daughter and, she’s in high school and she has 1 of my cars.
[00:20:16] Carolina: She’s 1 of the users on my car in case that she needs to buy something, whatever. And so I get notifications if she uses the card, I know exactly where she used it. And then I can call her and said, hey, why are you buying this? What’s going on? Or maybe I asked her. Hey, can you stop at the store and get this and that for the house and I get the notification.
[00:20:40] Carolina: Now I know. Oh, she’s on her way back because she just paid for this and she’ll be home in 10 minutes. So it helps keep track of everything.
[00:20:50] Paula: Yeah, finances and where your loved ones are.
[00:20:54] Carolina: That’s right.
[00:20:55] Paula: And their spending habits too.
[00:20:58] Carolina: Yeah, exactly. And it’s also for, at least for me as an accountant and as a single mom, it’s important to teach my daughters how to manage money, how to be responsible with money.
[00:21:11] Carolina: And that is a tool. It’s not and you need to know how to use it just like a computer and just like the phone, you need to know how to use money. And for me, it’s teachable moments as to there’s only a budget for this for groceries and there’s a budget for, entertainment. If you go out of that budget that I have assigned, then we need to have a conversation. And so thankfully, I haven’t had to have the conversation. They stick to it.
[00:21:42] Paula: That’s awesome. That’s awesome. I know we’re talking about upcoming holiday season, but there’s something else that I started doing, and that was reviewing my past holiday spending, to see okay, what did I do wrong last year that I can correct this year?
[00:22:00] Paula: Is that something that you recommend?
[00:22:02] Carolina: Yeah, absolutely. Historical data, as an accountant, that’s my jam, right? That’s how I analyze numbers. I don’t know. I don’t get to analyze numbers just based on this month. I get to analyze numbers based on history. What were the trends, right?
[00:22:18] Carolina: If what were the, for the last 3 years, if you have that data which. If you don’t use an accounting software to keep track of your expense, and there’s a lot of applications out there for even individuals, but all you have to do is download all your banking transactions and credit card transactions into an Excel spreadsheet, sort them out.
[00:22:39] Carolina: And then you can see this is what’s happening. I spend, 3, 000 last year. What did I spend it on? And then you look at it and you’re like, I really didn’t need to buy that bike because I’m not even riding the bike. Maybe I should sell the bike. You know what I’m saying? So it does help you look back and then decide, I don’t need to be buying those things.
[00:23:00] Carolina: Or I wish I had saved money to buy more of this because this was great. Whatever it is. So look at your history and always 3 years is a good measure because well, prices change. Inflation happens .Income changes, right? You may be making more money so you don’t necessarily have to do exactly the same as before, or maybe your income went down so you can’t really afford what you’ve done in the past.
[00:23:30] Carolina: It’s good to look at your historical data to decide, am I sticking with what I’ve done? What can I do better? As you’re setting up your new budget.
[00:23:40] Paula: Loving that. So adjust your future budget or the upcoming budget based on historic historical data from what you did last year.
[00:23:48] Paula: But you’re saying even being the accountant that you look at three years back and see what you did, how you spent wisely or unwisely and now prepare to do something better or you did it on wisely do something better. And if you did make it better, best.
[00:24:06] Carolina: Yeah, absolutely. Because if, let’s say you’re a family that travels for the holidays and perhaps, 3 years ago, there was only 2 of you.
[00:24:17] Carolina: And now this year, there’s 3 of you. The budget is going to be different. So you can say I’m going to spend the same thing I did last year because now you’re there’s more people or the other way around. There’s less of you. So I get more money to spend, as your kids graduate from college it’s great because then you don’t have all the expenses that you used to have, and you have more money for yourself.
[00:24:39] Paula: Hopefully.
[00:24:41] Carolina: At least that’s what I tell myself now that my oldest 1 is graduating.
[00:24:45] Paula: Oh, boy. So by staying accountable and proactive during the holiday season, you should, you will be able to enjoy the festivities even more than…
[00:24:55] Carolina: Yeah, and here’s one of the things that I would add to it is you can even have an accountability partner. Because here’s the thing. Yeah, an accountability partner, just let’s say you wanted to lose weight, right?
[00:25:09] Carolina: And you wanted to exercise more. And so instead of doing it alone, you do it with a friend or your spouse or, somebody or a coach, you hire somebody that will hold you accountable to what you said you were going to do and say, hey. So how are we doing? Are you doing the walks every day or how are you eating?
[00:25:29] Carolina: What happened? How did you fall off the wagon? So the same thing you can do with your holiday budget and shopping. Somebody that you trust and that is going to be honest and is going to tell you what you’re doing wrong. That’s a good accountability partner to say, Hey, you said you were going to buy this 10 gifts.
[00:25:50] Carolina: Where are we? How many gifts have you purchased and have you stuck to the budget? And you’re like, oh, I really haven’t gotten to it. Okay. There’s only four more weeks to go. What are we doing? How are we going to get it done? When you have a partner that is keeping you in check, it really helps. And also makes it more fun because you’re now, collaborating, or they can give you ideas of gifts that you can buy or offers that they find.
[00:26:19] Paula: I love it. Thank you, Carolina. This has been great. So to recount, avoid impulse buying. I love that. Renew or review your financial goals and monitor your account. I love this additional one. Have an accountability partner. Anything else?
[00:26:39] Carolina: I think just don’t get sucked in by all the advertisement that you’re going to see. You don’t need to buy everything that is out there and you, if you know what your goals are, just stick to it and you’ll enjoy the holiday season, but even more so you’ll enjoy the new year because you’ll know that you don’t have to stress over money.
[00:27:03] Paula: I love that. Even more you’ll enjoy the upcoming year because you don’t have to stress over money that you no longer have, right? You can’t spend it all. Oh boy. Caroline, I love these past 30 minutes and the financial, the tips, the accountability tips that you’ve given to us. Where can people find you online?
[00:27:24] Carolina: Absolutely. If you’re on Instagram my Instagram account is d.thecarolina aponte my name and I’m on LinkedIn, Carolina Aponte. I’ll show up in there. And we have a website for our firm. It’s cajaholdings.com. On Instagram, I’m constantly posting little videos with tips and advice on how to best manage your financial, whether it’s personal or business, and sometimes I make them fun.
[00:27:52] Paula: Sometimes?
[00:27:53] Paula: Most of the time, you make them fun. Fun it sticks, we remember it.
[00:28:00] Carolina: Yeah, exactly. It doesn’t money doesn’t have to be boring and it doesn’t have to be taboo.
[00:28:07] Paula: Yes.
[00:28:08] Carolina: And the better relationship you have with money, the better off you are.
[00:28:12] Paula: I love that. And so for my viewers and listeners, if you just enjoyed what you heard.
[00:28:18] Paula: Money can be fun, says Carolina. It doesn’t have to be taboo. Please tune in next week for another episode to learn and be inspired by these amazing immigrant women. As I said, they’re from the Caribbean and they’re from Africa. You can also find me online if you’d like to be a guest on this show. You can find me on my website, which is chattingwiththeexperts. com or on LinkedIn at paulaokonneh on IG. My handle there is at chat_experts_podcast. And I want to thank you again for inspiring and educating the amazing women worldwide. Thank you, Carolina. Thank you.
[00:29:00] Carolina: Thank you so much, Paula.
[00:29:03] Paula: It’s always a pleasure.