The holidays are almost upon us! And it’s never too early to create a plan for your Spending in the season ahead.
Having a Budget will allow you to be generous and giving without breaking the bank. We sometimes get caught up in the holiday spirit and find ourselves overspending every time we hit the store—and choosing an extra $50 gift (or two) to the pile. Last-minute gifts and seasonal expenses combined with fewer hours at work can quickly spell disaster!
Setting a holiday budget may not sound so cheery at first thought. After all, abiding by limits around Christmastime isn’t exactly inspiring. But the good news is that setting a budget doesn’t mean that you’ll have to go without or unleash your inner scrooge. It simply means creating a plan so that you can avoid waking up on Christmas morning with a mountain of debt and buyer’s remorse!
Let’s take a look at a few tips for setting an effective and pain-free budget this holiday season.
Be Specific With Your Gifts
The key to successful budgeting is to be specific. Since gifts are likely your biggest expense around Christmas, it pays to be precise with them. Simply make a list of everyone you hope to buy for and add a dollar amount for each person—aligning your grand total with your holiday spending budget. With this specific dollar amount applied, you’ll have the freedom to purchase whatever you would like, as long as it’s within the given amount. Remember, while it brings great joy to give, it’s your thoughtfulness that truly counts! Plan ahead and get creative to stay within budget. Being specific also means that you’ll be able to purchase your gifts with confidence—knowing right away whether you can afford them or not.
Create a Plan
Get ahold of a helpful planner, like Day Designer, and then begin mapping out your month. To keep organized and to ensure that nothing gets forgotten, have a method for keeping track of everything you’d like to accomplish during the holiday season. Don’t forget to include your travel plans, holiday cards, traditions, entertaining, and more. Next, as when budgeting for gifts, be specific about the amount of money that you will allocate for each area or event. Once you’ve tallied up how much everything will cost, you’ll know whether you can afford it or if you should make cutbacks in a few areas.
Start trimming—the budget that is! If your potential spending looks higher than you were expecting—and let’s face it, they always do!—then you should look for areas where you can cut back to give yourself a bit more flexibility. Cutting back on restaurant meals or coffee out will add some more funds back into your pocket. For entertaining, you could ask your guests to each contribute something—a side dish, dessert, or drinks. It will be just as festive! The secret to stress-free budgeting is prioritizing the things that you genuinely love and look forward to—and then cutting back in other areas.
Track Your Spending
It’s vitally important to track your spending. Your $15 impulse items add up much faster than you realize, particularly during the holidays. Consider having a spreadsheet or notebook handy to track your purchases and spending. This also will help you stay on top of who you have bought for and what you have bought for them, making your life easier during this busy time!
Create a Separate Account
If you find it difficult to keep track of your spending or stopping yourself from making random purchases, you might benefit from setting up a separate spending account. Many people set these accounts up at the beginning of the year and make small transfers throughout the rest of the year. When the holiday season rolls around, you’ll have a nice chunk of money available to use for gifts. If it’s a bit late for that this year, you could always plan to do it next year.
Know When to Stop
Finally, knowing when to stop can save your budget. Once your list is finished, and you’ve checked it twice, go ahead and stop. Last minute, unplanned shopping trips can jeopardize a budget if you’re not careful!
The best way to create a viable budget is to make sure it’s realistic. Setting unreasonably low amounts will only leave you feeling frustrated when it comes time to make the purchases. Instead, be reasonable, and give yourself a slightly wider margin than you’d think. Then have fun prioritizing, planning, and prepping for your holidays!
Do you budget for the holidays? Share your tips with us!
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