PLANNING YOUR 2023 HOLIDAY BUDGET

NOW IS THE TIME

I am definitely not one to rush the holidays.  I don’t love that most stores already have Christmas stuff out even though Halloween is still a couple of weeks away. But, when it comes to budgeting for the holidays, now is the perfect time to tighten up your holiday budget. And if you don’t have a budget for the holidays you can take the time now to create one so that you don’t find yourself overspending when the time comes. I like to plan my holiday budget each year at the beginning of the new year. That way I can be sure that by the time the holidays come, I will have enough money to cover my budget.

At the same time, if something happens during the year that causes us to need to reduce our holiday budget, there is time to think through any changes that might need to be made. Whether you’re reviewing your budget to ensure it still works for you or starting from scratch, taking a look now can make the holidays more enjoyable. Knowing that the budgeting part is taken care of can help you relax and enjoy the season.

WHY DO YOU NEED A HOLIDAY BUDGET?

There were so many years that I did not plan too much for the spending that would occur during this season. We would always spend way more than we could afford. I had no method of tracking what I was spending and the budget was non-existent. I never considered all of the costs that come up during the holidays above and beyond gift giving. We also had this terrible idea in my head that to show someone how important they were to us we had to buy gifts that were more expensive than we could afford. And I didn’t plan for all of those other non-gift-related holiday expenses. January would come around and we would have to figure out how to make up for the damage we had just done to our finances.

BEFORE YOU START CONSIDER YOUR VALUES

Before you start creating your holiday budget it is important to think about what is most important to you. Knowing what is most important to you about the holiday season can help you focus on where you want your money to go. It can also make it easier to make cuts if your budget is too high once you get it all down on paper. Holidays do not have to be expensive and they do not have to be so stressful. The expense and the stress are something we mostly create ourselves. We sometimes can feel like we need to get everyone the best gift and do all of the things. But, if you consider what you value most and focus on that, it can make the holidays a lot more enjoyable.

MAKE SURE TO INCLUDE EVERYTHING IN YOUR BUDGET

Probably one of the most important pieces of your holiday budget process is thinking through all of those ancillary costs outside of the presents you give people. A holiday budget is not only a list of individuals we want to buy gifts for with the amounts we want to spend on them. It’s important to consider that there are often a lot more expenses that come up during the holiday season other than the cost of gift-giving. If you cannot or do not want to spend too much during the holidays it is still important to go through this process. It’s easy to not realize how much potential spending there can be during this time.

Thinking through everything that may come up will help you prepare for what you do or don’t want to spend money on. It will also help you to see if you have enough money to spend on all the things you want to spend on. It’s much better to know this at the beginning so that you can make adjustments and decisions. You don’t want to get caught up in the moment and not have time to think through your holiday spending decisions.

MAJOR CATEGORIES YOU MIGHT WANT IN YOUR HOLIDAY BUDGET

Gifts. Make a complete list of everyone you purchase gifts for. Don’t forget any teachers, dance instructors, sports coaches, work events, etc. You do not need to purchase a gift for everyone who has any interaction with your child over the year. But, if you do plan to purchase a gift, you want to include it in the budget.

Gift-giving supplies. This would include things like tissue paper, gift wrap, tape, gift bags, and gift tags. I always like to stock up on these during the holiday clearance sales from the prior year.  I do still usually end up needing to pick up something though!

Special events. We usually do some type of drive-through light display that has a flat fee per car. Some home displays in our area collect money for a charity that I need to put money aside for.

Food and drinks. For example, sparkling cider, alcoholic drinks, sodas, etc. Think about anything special for the holidays that you might not normally purchase. Do you make any special meals, desserts, etc?  These often cost more than your typical groceries.  These extra costs should be part of your budget. Me and my daughter’s also go to IHOP for breakfast each year on Black Friday.  This needs to be in the holiday budget.

OTHER THINGS TO INCLUDE

Gas for any extra traveling you might be doing. Holiday cards and stamps are needed to mail them. Gingerbread house kits. Day after Christmas shopping. Each year we go shopping the day after Christmas looking for some clearance stuff.  Could be wrapping paper, decorations, who knows?  So, I put some money aside for that too. New Year’s Eve – I include this in my holiday budget too.  The amount I include is to cover things like appetizers, drinks, hats, and blowers. Even though we have a detailed holiday budget, I still include some misc dollars.  It seems like something always comes up that you might not think of, and it’s nice to know you have a little cushion.

MAKE CUTS IF NEEDED

Once you get your budget by person and all of the ancillary items listed out the total may come to more than you would like to spend. Because you are doing this ahead of time, you can make cuts if needed. Often you can just trim a little bit here and there to get down to a number you are more comfortable with. Doing this process early allows you time to think about where you might want to cut some costs.

STICK TO YOUR PLAN!

It can be so easy to get caught up in all of the excitement of the holiday, but it is really important to make sure you stick to the budget that you set. When shopping for gifts, try to take your time and find something that’s special and also fits within your budget. Unless you know there are a few extra dollars available in your budget, don’t grab extra stuff that was not on your list. Try not to make an impulse purchase.  The stores are set up this time of year to play on your emotions and get you to make impulse purchases. So, be careful not to just start grabbing things that you did not plan for!

TRACK YOUR EXPENSES AGAINST YOUR BUDGET

It can be difficult to stay on top of your holiday budget if you are not tracking your purchases. Especially if you are shopping over an extended period. We can easily forget the people who we already purchased items for. I like to record my purchases against my budget as soon as I get home from a shopping trip. Otherwise, I forget what I purchased and don’t want to have to dig through bags to remember what the items were. When you go shopping, bring a printout (or electronic version) of your most recently updated holiday budget with you. It makes it so much easier to remember who you still need to shop for and how much you have available to spend.

SOME OTHER TIPS

Make notes for next year. If you realize that there were some expenses you did not think to include in your budget or that you did not budget enough for, make a note in your file now. That way next year you can make adjustments or be more mindful about the amount you are spending on those things.

Make sure to enjoy the holidays! Don’t stress yourself out by buying more than you can afford. It is the thought that counts. So keep that in mind when tempted to purchase gifts above your budget for someone. There is usually something that they will like just as much that fits within your budget. You will feel much better and can enjoy your days more when you spend what you have in your budget and not have to worry about recovering from major overspending

Thanks so much for checking in! If you would like to hear the podcast version of this topic check out Lola’s Frugal Life Podcast! Also, be sure to check out my other blog posts on this site!

I would love to have you join my mailing list! Sign up here:

Email address:

Leave this field empty if you’re human: