PLANNING YOUR HOLIDAY BUDGET
You can hear the audio version of this discussion on my podcast at Lola’s Frugal Life Podcast, on Apple Podcast, and many other platforms!
DON’T LET THE HOLIDAYS BECOME A SOURCE OF STRESS
There were many years where the holidays would come. I would go out and shop for random things for the people on our list. We really had no good method of tracking what I was spending. I didn’t really have a budget for those I was buying for. In addition, I had this idea that the more of an expensive gift I could buy for someone, the more they would realize how important they were to us. And I definitely didn’t plan for all of those other non-gift-related holiday expenses. January would come and we would be completely broke.
MAKE SURE YOU HAVE A REALISTIC BUDGET – INCLUDE EVERYTHING
Sometimes when we set up a holiday budget, we make a list of all the people we need to buy gifts for and how much we want to spend on each person. 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 are having a challenging year financially, or if you have just decided that you don’t want to spend too much during the holidays it is still important to go through this process.
Thinking through everything that may come up will help you prepare for what you do or don’t want to spend money on during this time. It will also help you to see if you have enough money to spend on all the things you want to spend on. Putting down on paper all of the costs associated with the holidays, above and beyond gifts, can give you a better perspective on what you are looking at spending. It’s much better to know this at the beginning so that you can make adjustments and decisions.
MAJOR CATEGORIES YOU MIGHT WANT IN YOUR HOLIDAY BUDGET
Gifts of course. Make a complete list of everyone you purchase gifts for. Don’t forget any teachers, dance instructors, sports coaches, work events, etc.
Gift-giving supplies. This would include things like tissue paper, gift wrap, tape, gift bags, 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. There are also some home displays in our area that collect money for a charity. I make sure to put aside some money for those collections.
Food and drinks. For example, sparkling cider, alcoholic drinks, sodas, etc. 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. My daughters and I go to IHOP for breakfast each year on Black Friday. This needs to be in the holiday budget.
Other things! Holiday cards and stamps that are needed to mail them. Advent calendars, 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 really 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.
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. While you might see some gifts that you think will be great but don’t fit into your budget, there will always be a bigger better gift. 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.
If you really find something that is not part of your budget that you feel like you must purchase (for someone or for yourself), take at least a day to think it over. Try not to make an impulse purchase. The stores are set up this time of year to really play on your emotions and get you to make impulse purchases. Think it over, check your budget to see if you can make it work, and then decide.
TRACK YOUR EXPENSES AGAINST YOUR BUDGET
If you are not tracking your holiday purchases against your budget you will most likely have a difficult time sticking to your budget. It’s a good idea to record your purchases against your budget as soon as you get home from a shopping trip, or right after you purchase something online. If you are not tracking timely, it’s very difficult to remember what has already been purchased and how much is left to spend for various people.
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
If you have children, they often ask for things that are expensive and it can be really tempting to try to get them everything they ask for. It’s not worth it if it will put you over your budget and cause you to spend money that you don’t really have for this purpose. Depending on your children’s age – try sharing the budget with them (if you feel comfortable with that). This can help them write a list that is within their budget and will help them prioritize what they really want.
Make notes for next year. If I find that I did not budget enough in a certain category, or I missed budgeting for an expense that I always have, I make a note in my budget file so that I don’t forget next year.
Start shopping early! Like all year round if you are able to. Try setting your budget at the beginning of the year. Then you can take advantage of the time you have to be always on the lookout for a great gift. You don’t have to make that last-minute purchase when you shop throughout the year. Last-minute purchases often end up putting you over budget because your choices are limited. Certain age children or teens usually want something totally different by the time it gets closer to the holidays. So, it may be best to wait on shopping for them!
Make sure to enjoy the holidays! Don’t stress yourself out by buying more than you can afford. You will feel much better and can enjoy your days more when you spend what you can afford!
Thanks so much for checking in! If you would like to hear the podcast version of this topic to check out Lola’s Frugal Life Podcast! Also, be sure to check out my other blog posts on this site!
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