There’s two types of people in this world.
There’s the Santas: the ones who couldn’t DREAM of having a Christmas where they don’t get every single friend and family member a present. But also, they don’t dare to forget their numerous coworkers, their neighbors, and sweet old Shirley who grooms the dog every three weeks. Maybe the kids’ teachers each need something too.. a nice basket, perhaps? Oh, can’t skip over their friends’ kids, either. Each of them definitely needs something too. How many of them are there again?
Hey. The more, the merrier, right?
And then there’s the Scrooges: the ones who absolutely dread the thought of the holidays, who nervously sweat at the thought of a pumpkin spice latte, and who typically go M.I.A. by October 1st. These same people are the ones who can’t stomach the thought of buying gifts for everyone they know — even if it’s just a couple family members and close friends. Their wallets shriek every time they’re opened to purchase anything around the holidays… some say they’re “the shrieks heard ‘round the world.”
Because it’s not the most “wonderful” time of the year. Oh, no: it’s the most expensive.
OK, both of those are major extremes at opposite ends of the spectrum, and maybe there really ARE more people out there than just the two.
But whether you’re a Santa, a Scrooge, or somewhere in between — maybe you could benefit from creating a holiday budget.
What do ya say? Let’s end the taboo topic of holiday spending, and save some money!
Determine A Spending Limit
The first step in making a budget is determining how much we’re actually budgeting for. (This is especially important if you’re used to turning to your credit cards to cover those pesky holiday expenses.)
Now, if you started stashing some money aside for the holidays MONTHS ago, great! But if you seem to be a little late to the saving party, no worries! You still have some time to try cutting costs here and there. (Need ideas? Check out these 30 Mom-Approved Ways to Grow Your Money [Instead of Pinching Pennies!].
And if cutting costs isn’t your thing, then maybe you could make some extra cash with one — or more — of these 26 Wildly-Profitable (And Real!) Jobs For The Stay-At-Home Mom!
Between now and the holiday season, think about taking on a seasonal part-time job, do odd jobs, hold a yard sale full of unwanted/unused items, sell baked goods, offer babysitting or petsitting services, freelance online, become a holiday photographer, and so on.
Once you’ve figured out your magic number for how much you’ll need, it’s easy to determine how much you need to save up each month starting in January!
Map Out Your Expense Categories
After deciding how much you can afford to spend, you’ll want to write out a list of expenses that you plan on buying for the season.
Creating categories for these expenses will allow you to allocate money specifically for each one!
Some of the most common holiday-related expense categories are:
● Wrapping supplies
● Holiday outfits
● Travel expenses
● Other holiday expenses
Figuring out your categories in advance will help you stick to your spending limit, and if you have an idea of what types of gifts you’d like to get for everyone on your list, that’s even better!
Set Up Your Holiday Budget
So, now that you’ve got your list of categories, we can get to the actual budget side of things!
The spending limit you came up with earlier will keep you from going overboard when dividing up for each category.
As an example on how to find each category’s limit, we’ll start with gifts. Keep in mind, though, that this category is usually the biggest (AKA, the most expensive) in your budget.
First, decide on an amount (or maximum amount) you’d like to spend on each person’s gift — it’s important to be realistic here! — and write it next to their name.
Add up all of the amounts and you’ve got your gift expense total!
Once you’ve done this with all of your holiday expense categories, you can add up all of the category totals to find your potential spending amount!
Figure Out Your Total
Subtract your potential spending amount from your spending limit. If your potential expenses exceed your holiday budget limit, you’ll need to either revise the budget or tweak your categories a bit so you don’t go over what you can actually afford.
If you do happen to end up going over your budget, never, I repeat: NEVER use your credit cards to cover the extra expenses. Always look for ways to cut spending in your daily life so you can stay within your budget!
Revise Your Budget
If you want to tighten some screws in your category expenses, there’s a couple of ways to do so.
First, prioritize the expenses that are really important this holiday season. For example, if you’re planning on traveling to another state to visit family this year, or if you’re hosting a big holiday dinner party at your house in the coming months, then these are probably the categories you want to put more focus on.
You could purchase gifts only for the kids. If you’re crafty, you may choose to make something for everyone on your list. Maybe you could even make a few cuts on unnecessary items, like sending holiday cards or brand new ornaments/decorations. You could easily reuse things from last year!
Track and Adjust Your Budget
After revision, it’s important to keep a close eye on your budget so you can stick to your original spending plan (remember, we’re trying to stay within a certain amount so we don’t fall into the nasty clutches of unwanted holiday debt!). And hey, things happen — maybe you’ll have to cancel or change some planned purchases at the last
minute, or you may have a different idea for a gift out of the blue — no worries! This isn’t bad; you’ll just need to be sure to adjust your budget accordingly if you happen to go overboard on an item or if you change gifts.
By tracking your holiday spending, you can cross items off your list as you get them, and it’s then easier to see if you’re sticking to your original budget! This way, if you go over budget on an item, you can immediately start looking for ways to trim your expenses on another.
Create an expense category for holiday savings and decide how much you can afford to allocate towards it. Then, you need to put aside the amount you have decided on every month for this category to build holiday savings.
Let’s face it: the holiday season is probably one of the most stressful times of the year. But it doesn’t have to be!
Whether you’re a Santa or a Scrooge, you’re bound to benefit from a holiday budget. The earlier you can start saving up for it, the better; but if not, there’s always options to cut spending so you can save up when you can!
What’s cool here, is that you can change things up based on your preferences for next year. If a specific category isn’t working for you this year, or maybe you had issues with under budgeting, you can always start fresh at the beginning of each year to have more time to work these issues out.
Just be sure to continuously track and adjust your budget if needed; try to stay away from creating a new debt.
And however you’re planning to save up and spend your time, I wish you a very Merry Christmas, Happy Holidays, and Happy Budgeting! You’ve got this!