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Create a Christmas Budget That Actually Works
The holiday season is approaching fast, and to many people, that means getting into debt. The holiday season can be a stressful time of year if you are not financially prepared. This is where a Christmas budget comes in super handy.
Nobody wants to get into debt during the holidays, yet many Americans rack up over $1000 of debt this time of year. A Christmas budget is how you are going to afford to give Christmas gifts and all the other expenses that come with the holiday, without spending months or even years trying to get out of debt.
The Christmas budget you create for your holiday expenses should come from your savings or money you are able to save and earn from now until Christmas. It should not come from the available credit remaining on credit cards, even if this means having a slim Christmas budget this year.
Yes, giving your children, friends and family nice gifts is something everyone wants to do, but at what cost? Do what you can now, then going forward, start preparing early so you can afford the holidays without breaking the bank.
Christmas Budget Planning
Choose a method to create and track your Christmas budget. You can do this in many ways. You can create a simple spreadsheet, use an app or a simple pen and paper. It really doesn’t matter which method you choose as long as you find a way to stay on budget during the holidays.
This Christmas budget planner is my top pick to stay on top of my Christmas budget every year. It has so many helpful ways to stay on top of everything during the holiday seasons when things seem to be really hectic.
Set Your Christmas Spending Limit
The first step to creating a Christmas budget is to set a spending limit for the upcoming expenses. How much do you have saved for gift giving? How much could you save up from now until the holidays? What expenses are most important to you and what could you do without? These are all questions you need to ask yourself to prioritize holiday spending.
Make a List (and check it twice)
Once you come up with a reasonable amount that you can afford to spend this holiday season, you have to make a plan on how that money will be used. The first thing you need to do is make a list of all expenses that are coming your way.
Create a list of everybody you want to buy gifts for with a spending limit for each person. You also need to make a list of all the other expenses that you are facing during the holidays. Think of things like holiday decor, wrapping supplies, secret Santa gifts and much more.
Then there’s food and drink if you are hosting Christmas at your place. Even if you aren’t hosting any parties, you probably will need to make a dish to bring or a gift for the hostess.
Maybe you are traveling out of town for the holiday or are having some house guest staying with you. These are all expenses that you must take into consideration in your Christmas budget. List every single expense you can think of and how much it is going to cost.
Balancing your Christmas Budget
Once you list every holiday expense, you will need to make sure you can afford them based on your spending limit. If you have (or will have) enough to cover everything, great. Now you just need to make sure you stick with your list and not go overboard while Christmas shopping.
If your expenses are more than you can afford, you are going to need to tweak your Christmas budget. First, determine how much money you will need to either earn, save or cut from your budget. Are there things that you can do to earn the money?
Ways To Afford Christmas
Maybe you can sell some stuff that you don’t use or need to make up the difference. How about taking on a side hustle for a while? There are many ways you can make money in your spare time to come up with extra cash.
You can also find ways to save money on your day to day expenses to set aside for your Christmas budget. You can cut out unnecessary expenses, you can meal plan to save money on groceries, or you can find cheaper alternatives to things you spend money on every month.
Lastly, if you are not able to come up with enough cash to pay for everything, you are going to need to cut back on some expenses. Maybe you can trim the budgeted amount for each person’s gift by a little bit. How about simply cutting out some of the expenses that aren’t truly necessary or find ways to cut back.
You can make some handmade gifts instead of buying them or you can even give the gift of time to some people on your list in the form of babysitting their children so they can have a night out, doing a chore for them that you know they dislike or anything to help them out. I’ll bet that this might be the best gift they receive this year.
Stick to Your Christmas Budget
Once you’ve balanced your Christmas budget, you must stick to your plan. I know that it can be really tempting to buy stuff that you hadn’t intended while Christmas shopping, in fact, stores make it extremely difficult with there marketing tactics.
Make sure you bring a list with you when you go shopping and stick to it. If you are an impulse spender, take only enough cash for the things you intend to buy and leave your cards at home.
Look for deals while shopping to cut back on expenses, review store circulars to find the best place to buy specific items, use extensions to help save money while shopping online. Save money on food expenses with coupons, and money saving apps.
There are many ways to cut back on spending by putting a little bit of effort into it, making smart buying decisions and finding cheaper alternatives.
Set up a Christmas Savings Plan
Starting a Christmas savings plan is one of the easiest ways to avoid the financial hardship of the holiday season. It may be too late for this year, but going forward start putting some money aside every week or month. This way you have all year to save for the holiday.
Open a high interest yielding savings account and contribute a small amount to it on a regular basis. I keep mine in a CIT Bank account for the simple reason that it pays way more than most savings accounts. Why not earn some free money with your savings?
Staying on top of your expenses during the holiday season is imperative to not get into debt year after year. I know it can be tempting to overspend because you want to give the people you love special gifts and make the season magical. You must also think of how debt will affect you once the holidays are over. After all, there are another 364 days in the year.
Grab a copy of this Christmas Budget Planner to stay on top of your holiday budget.