Holiday Budgeting

 

It’s the most wonderful time of the year…until you get the credit card bills in January.  Christmas gift-giving can cause financial stress when shopping and later when trying to pay the bills.  Here are some tips to keep your season festive while still sticking to a budget and not derailing your financial goals.

 

1.      Know your limits.  Set a budget for Christmas spending.  The four biggest categories for most people are gifts, travel, entertaining, and decorating.  But don’t forget about other items that arise – extra tips for service people in your life, holiday clothes, pictures, postage for shipping gifts, etc.  Identify these expense categories beforehand and estimate how much you can spend on each one.  Then, like your regular budget, track your expenses.

 

2.      Plan ahead.  If you can set aside money in your regular budget for a couple months ahead of time, use cash!   If you use credit, plan to pay it off within two months. Next year, plan “holiday spending” right into your monthly budget so you have enough saved by December that you don’t have to use credit.   Monitor your expenses and save your budget to help guide you next year.

 

3.      Make a list.  Jot down the names of everyone you’d like to give a gift to.   Now, see if you can make the list a little smaller.  Could you do a gift swap with your siblings or another group instead of shopping for everyone?  If money is really tight, explain to some people that you have a tight budget and can’t exchange gifts – sharing a potluck meal with friends can result in just as must good cheer as a gift.  When you have your final list, set a price limit for each gift.

 

4.      Think creatively.  Consider your own gifts – what can you make or offer someone?  Some ideas: volunteer in your child’s classroom in lieu of a gift; handwrite a letter to your parents telling them what you have learned from them; offer to make someone a home-cooked meal; or swap babysitting with a friend.  There are tons of ideas online for homemade gifts, from crafts to recipes in a jar to homemade soap.  Take a look and try something new!  If you are purchasing a gift, remember that a thoughtful gift chosen with the recipient in mind will be more meaningful than the latest gadget.

 

5.      Shop early to take advantage of deals.   Maybe.   Taking advantage of Black Friday or Cyber Monday deals is great, but be careful not to buy something just because you’re caught up in the excitement.  With smart phones and the internet, comparison shopping has never been easier.  Make sure it fits into your gift-giving plan.  And, if you do buy early, cross that person off your list and make sure you don’t keep buying for them!

 

Above all, remember the reason for the season!