When the holiday season is upon you, you may feel a combination of joy, thanks, goodwill toward others and sheer financial panic. Christmas really seems to sneak up on you these days, doesn't it? The season of giving isn't really about maxing out your credit card, so do some careful financial planning in advance so you don't end up losing sight of what Christmas is really about.
Christmas Budget Tips
Step 1
Pick a number (and stick with It). Setting a Christmas budget starts with the basics: grab a piece of lined paper and write down an all-encompassing number on the top. Consider a ballpark figure for what you would like to spend and then tailor it to what you know you can spend. Be more conservative than liberal in case an emergency arises in the meantime. Moreover, don't plan your Christmas budget around your credit cards' limits. Plan to use what you have.
Step 2
Organize your list. You should only organize your detailed Christmas expenditure list after you have come up with your ballpark figure. (Planning it the other way around can tempt you to budget for more than you know you can realistically afford.) On the same piece of lined paper, write down Christmas categories, including decorations, food (including Christmas cookies and Christmas dinner), cards, gifts, giving (such as charities) and activities (tickets for ice skating and the nearby nativity production). The gifts section should be subcategorized by every person you want to get a gift for and how much you will spend on each person.
Step 3
Set money aside. Create an account specifically for Christmas savings or make an informal savings jar. If you have a formal account, there are a lot of ways to set aside money without noticing a huge difference. For example, you can use the "round down" method after you pay bills each month: if you are left with $873 dollars in your account this month, send $73 to your savings account. If you have a savings jar, throw any loose change or small bills into it.
Step 4
Cut back. Cutting back on spending before the holidays begin can help you save extra dough, and it may even help you get into the holiday spirit. For example, if you usually drink a cup of gourmet coffee every morning before work, opt to bring some home brew in a mug and put the money you saved into your Christmas account. Alternately, you can skip the coffee altogether while thinking of people who aren't fortunate enough to have such treats every day. Another way to save money is to spend more of your spare time volunteering. You will save money and be helping others simultaneously if you would've spent that time at the mall or at a sporting event.
Step 5
Spend less. You can get more with less if you are creative and/or you find discounts. In general, buying Christmas items---décor, cards, gift wrap---from the clearance bin right after Christmas (or even off-peak season, such as in April) can save you tons of money for the next year. You can also make your own holiday cards, decorations and gift wrap. (For example, you can use recycled paper, magazines and newspapers to wrap gifts.) Consider finding additional discounts on holiday food and gifts by buying in bulk at places like Costco. Also consider braving the rush of Black Friday (the day after Thanksgiving) crowds to find some hefty discounts.
Tips and Warnings
- Consider donating any remaining Christmas budget money to charity.
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