Wallets are opening up this holiday season.
Some of that spending will be rewarding, but some will lead to a debt hangover in 2012. Pausing to develop a spending plan can help limit impulsive credit card purchases and set your priorities for the coming year.
With that in mind, these 12 ways to spend $1,200 in 2012 offer a mix of the practical and the indulgent. Even if you don’t have that much, the tips may give you some ideas on how to get the most from your money to help you and others.
1. Invest in your career.
Take steps to jump-start your career: Pursue a professional certification, sign up for a college course, get proactive about a job search.
Thinking about changing fields? Start with four hours of private coaching at $125 an hour to get an assessment, customized resume, targeted cover letter and a plan for your search. Then get group coaching to help brainstorm strategy. The Five O’Clock Club, a national career counseling and outplacement company, charges $380 for 10 weeks of coaching sessions by teleconference. Spend the remaining $320 on networking lunches and new clothes so you look sharp and feel confident.
You probably need the outside help. Only 3 percent of jobs are filled through search firms and 3 percent through ads, says Kate Wendleton, Five O’Clock’s president.
2. Gear up with a new computer.
Dying for a razor-thin MacBook laptop? A $1,200 budget allows room only for the 11.6-inch MacBook Air ($1,000); the mid-range, 13.3-inch version runs $1,300. If a larger screen is essential, try one of the 13-inch Sony S Series laptops, with list prices starting at $800.
Also consider if a tablet would work for you. Apple Inc.’s iPad 2, with a 9.7-inch screen, sells for as low as $499. Word is the next-generation iPad 3 will be released early next year. Another iPad rival is rolling out this month — a new 10-inch tablet called the Asys Eee Pad Transformer Prime, also for $499.
At those prices, you could buy a tablet and a laptop for less than $1,200. The HP Pavilion g7, with a 17.3-inch screen, is a Consumer Reports Best Buy at $570.
3. Support a candidate or cause.
Change only comes about through involvement. Consider supporting candidates and issues you’re passionate about in the coming election year.
You may not be in position to donate $1,200, but that amount falls easily within the allowable limits. An individual is allowed to give a maximum $2,500 per election to a candidate for federal office, or $5,000 per year to a political action committee that supports federal candidates. State laws vary. Political contributions are not tax-deductible.
4. Invest in a low-risk mutual fund.
You can reduce your portfolio’s exposure to stock market volatility.
The Standard & Poor’s Low Volatility index holds the 100 stocks in the S&P 500 that have had the lowest volatility over the past 12 months. Those high-quality, dividend-paying stocks historically have performed about as well as the overall market. Tap into this strategy through the PowerShares S&P 500 Low Volatility exchange-traded fund (SPLV), recommends Jack Ablin, chief investment officer at Harris Private Bank.
Also consider one of the handful of no-load mutual funds with a $1,000 required minimum investment and a gold-medal rating from Morningstar. Try FMI Large Cap (FMIHX) for a focus on large U.S. companies or Oakmark Global I (OAKGX) for international exposure.
5. Train your inner Olympic athlete.
Make the July start of the London Summer Olympics your deadline to get in shape or tackle an international challenge.
Join a gym that fits your budget. Take swim lessons at the Y. Get ready for your own track and field event, such as a local 5K race. Buy a pair of walking or running shoes made in the USA; New Balance specializes in them: http://www.newbalance.com .
If “faster, higher, stronger” doesn’t resonate as your personal motto, $1,200 should buy a round-trip plane ticket to London or elsewhere during the Olympics. If you can’t afford the rest of the journey, take a foreign language class — maybe Russian, to get ready for the 2014 Winter Olympics in Sochi.
6. Make a feel-good investment.
Lend money to a fisherman in Cambodia, a beautician in Turkey or a dairy farmer in Colombia through micro-financing ? small loans to impoverished entrepreneurs in developing countries or the U.S. The loans are as small as $25 at Kiva, a nonprofit organization based in San Francisco. You could split up the $1,200 in any number of ways among the would-be borrowers shown at http://www.kiva.org. Lenders get email updates on the projects as their money is repaid.
Or lend to any of more than 75 nonprofit and socially responsible organizations through RSF Social Finance’s Social Investment Fund, http://rsfsocialfinance.org. The minimum investment is $1,000, but lenders get a 1 percent return and the San Francisco-based fund claims a 100 percent repayment rate.
7. Prepare for Mother Nature.
This year was a record-breaker with a dozen billion-dollar weather disasters, including devastating droughts and wildfires; 19 tropical storms; and Hurricane Irene, which caused more than $73 billion in losses. If 2012 is as bad or worse, are you prepared?
Consider buying a portable generator, which can cost more than $1,000 depending on power and features. Larger “standby” generators that run on propane or natural gas cost more.
Homeowners with basements should have a sump pump, which will cost about $150 or more. The rest of the $1,200 can be used to stock up on supplies. You can put together your own disaster supply kit with guidance from the National Hurricane Center, http://www.nhc.noaa.gov, or buy one on Amazon for $100 or more.
8. Help your community.
You could play Santa Claus all year round by giving to local organizations you know or are personally involved with. An added plus is that you may be able to get a better sense of how your money is making an impact.
Screen any organizations through GuideStar.org, CharityNavigator.org and the Better Business Bureau.
9. Support the arts.
See live theater, concerts, dance.
The amount could be spent in one fell swoop ? on a trip to see Broadway shows or on subscriptions to a top-tier arts organization. For less than $1,200, you can get at least two season tickets to most theater companies, operas and symphonies. Broadway Across America, http://www.broadwayacrossamerica.com, brings the best of Broadway to 40 U.S. cities.
Or spend it on big-time concerts. After watching Madonna during Super Bowl halftime, maybe you’ll want to shell out to see her 2012 tour.
10. Get bookish for relaxation and profit.
A basic e-reader like the Nook Simple Touch from Barnes & Noble costs only $99 and can load books from libraries and other bookstores.
That leaves more than $1,000 to spend on books for you and as gifts. Buying hardcover versions of all of The New York Times’ “100 Notable Books of 2011” at list prices would run you $2,915.97 plus sales taxes, so that’s out. But you can easily pamper yourself with a book a month, choosing titles like Chad Harbach’s heralded debut novel “The Art of Fielding” ($25.99), Charles Shield’s Kurt Vonnegut biography “And So It Goes” ($30) and Erik Larson’s “In the Garden of Beasts” ($26). The e-versions sell for less than half those amounts.
If you set up a reading fund, put the balance in a high-yielding online bank account. Throughout the year, buy some classic investing books, such as, “The Intelligent Investor,” by Benjamin Graham and “A Random Walk Down Wall Street,” by Burton Malkiel, and invest with your knowledge at year’s end.
11. Fund date nights for a year.
Strengthen a relationship with a year’s worth of date nights with a spouse or special someone.
Stepping out once a week could be a stretch for just $23, but you could do it with a little creativity. Think movie tickets, museums, a bottle of wine to share in the park. Or 12 $100 nights out could be a lot of fun too.
12. Prepare for the end.
Even if you chuckle at the Mayan prophesy that the end of the world or some other calamity will occur in late 2012, let it be a reminder to take some steps to prepare for your own eventual passing.
Long before retirement, everyone should have an estate plan with a will, beneficiaries for all accounts, a durable power of attorney, a health-care proxy or living will, and possibly trusts for any minor children. And those over 65 should also discuss long-term strategies with an adviser, while they’re still able.
An investment of $1,200 toward an estate plan can go a long way toward protecting your estate and minimizing potential expenses and hassles for your heirs.