Santa isn’t alone in making Christmas happen – he enlists help from his money fairies and elves to ensure costs don’t spiral out of control. Adopting a budget and planning ahead are effective strategies for keeping costs in check.
Make budget lines for gifts, food, decor and all things holiday – much as you would with other categories in EveryDollar – just as if it was any other category. If any items from last year can still be used this year, take that amount off the total budget amount.
Start Early
Budget-savvy Christmas shoppers start thinking ahead every year to plan how they will cover any additional expenses that arise, from gifts for family members or extended social circles to travel arrangements and gifts for themselves. By having a clear idea of your spending plans and timeline, stress, headaches, and debt associated with last minute shopping can be avoided altogether. Planning now could save yourself the headache.
Create and adhere to a Christmas budget spreadsheet or similar tool in order to better control your Christmas spending and stay within your means. A budget will allow you to establish individual gift budgets, decor costs and travel costs, with savings accounts set aside specifically for Christmas savings accounts allowing easier adherence.
Start by writing down each item in the “Items” column, estimating their costs in the “Budgeted” column, and adding up all expenses against your gift budget number; compare these two figures; if they don’t correspond, modify expectations as necessary.
An additional way to save money is by searching out deals throughout the year on decorations, food and travel costs – such as decorations, food and travel costs. Be vigilant for sales or discount opportunities and try purchasing items early if possible. Also consider using credit card points cards and loyalty programs to earn rewards that could save money when it comes to gifts or travel costs.
As part of your budget strategy for Christmas expenses, it’s also wise to review your regular expenses and identify which costs can be cut or eliminated temporarily in order to help fund them. This may mean limiting restaurant outings, purchasing generic groceries instead of gourmet ones and cutting back on entertainment spending altogether. Furthermore, it may be worthwhile exploring different avenues such as starting a side hustle or selling items to generate additional funds.
Make a Gift List
Holiday spirit can cause us to overspend, leading us into debt by January 1. To prevent this from happening, plan ahead by creating a list and using a budget as your spending guide.
Start by writing down all of the people for whom you need gifts and how much per person is your ideal spending limit. After creating this list, look through and identify where there may be ways to reduce spending; perhaps there are household items which could serve as gifts (e.g. wrapping paper or gift bags)? If that’s the case, this amount can be subtracted off from your overall budget figure established in step 4.
Consider exchanging items that don’t quite meet their needs for someone special to show your care without exceeding your Christmas budget. Doing this may show just how much they mean to you while not going over your spending limit!
One option for saving money while making sure everyone receives something they enjoy is purchasing group presents like games or concert tickets. This ensures everyone will find something suitable.
Once you have made your gift list, the shopping begins! Remember it’s best to shop early during sales events for maximum success; creating either an electronic or paper shopping list can keep things organized while giving a sense of fulfillment as each item purchased is crossed off your list.
If you do overspend, don’t be embarrassed to admit it and explain what occurred – this will help manage expectations as well as teach your children valuable financial lessons.
If your children want something they don’t yet possess, it is crucial that they see that it can be earned rather than simply expecting it from Santa or someone else. If they want a spectacular Christmas experience this year, it is up to them to save up for what they really desire and have an excellent holiday celebration.
Don’t Forget About Travel
If you’re traveling home for Christmas, it is advisable to include travel costs as part of your budget. This could range from airfare or hotel stays; just remember to book them as early as possible to take advantage of lower fares.
Food should also be an integral component of holiday spending; it can often be the largest item on most family budgets. Planning ahead by stockpiling essentials like canned and dried goods can save significant amounts over time.
Planning meal menus ahead can help prevent overspending on restaurant meals and grocery shopping trips, while making it easier to locate affordable ingredients.
Reminders about expenses such as wrapping paper, Christmas trees and stocking stuffers should all be factored in when creating your budget. If unsure how much to expect for Christmas 2019, take a look back at your past spending to help gauge a realistic estimate of future costs.
Once you know your total Christmas spending amount and have identified who to purchase for, the next step should be prioritization. This means rating each gift item as either “necessity”, “nice to have”, or “can’t do without”. This will allow you to determine exactly how much to spend on each person.
Speak to friends and family about splitting the cost of gifts among themselves – this can help spread out your holiday cheer while teaching children budgeting and financial responsibility at the same time!
Unmanaged Christmas spending can quickly spiral out of control and leave you facing debt in the new year. By taking these simple steps this holiday season and planning for financial ruin correctly, MyBudget’s personal finance fairies and expert money elves are here to assist! Just contact us, and they’d be more than glad to work together with you.
Don’t Forget About Home Decor
Unbearable spending sprees over Christmas can quickly spiral out of control if left unplanned, which is why it is crucial to start planning early for your finances and ensure your holiday spending does not go beyond your financial means. There are numerous steps available that can help manage spending – even this year!
One effective way to ensure you don’t overspend is to create a Christmas budget. Doing this will provide a clear idea of how much you are willing to spend on gifts, food, decorations and other costs associated with Christmas celebrations – and allow some room for costs that might rise over time.
Rethink some traditional holiday traditions can help reduce costs. For instance, if you typically spend too much on holiday photos each year, consider going with homemade shots this time instead. Also try not buying expensive seasonal items such as Christmas trees or lights; rather use homemade decorations or opt for cheaper options like fake trees and LED lighting instead.
Consider any Christmas-related expenses such as food for holiday parties and gatherings, etc. Make a list of expenses likely to incur and total them up. Compare this figure against your overall budget figure (which will be determined in Step 3) – if your total is greater than planned, reconsider some plans or reconsider expenses altogether.
As it’s best to avoid debt during this season of spending, use savings or credit you already have instead of taking on new loans to cover Christmas expenses. Debt can become difficult to pay back once bills start arriving; building healthy money habits is important!