How to Budget for a Fabulous Christmas

How to Budget for a Fabulous Christmas

The holidays are usually a time of happiness and excitement, from the travel to parties to presents.  We are bombarded by what we should have, wear, buy, eat, and do.  It can blow your budget in an instant if you aren’t paying attention. 

Here are some ways to have a great holiday season without breaking the bank in the meantime:

1.  Start at the beginning – determine just how much money you have to spend for the holidays, and set a budget.

Hopefully, you’ve set aside a little each month for this year’s celebrations (and if you haven’t, you need to plan to do this next year). The goal here is to not finance your Christmas by over-extending your credit cards, but use the money that is available. You may shift some money from other parts of your household budget, if you have a cushion available already, or from home repairs or a vacation fund.   The key here is that you shouldn’t be spending a year, or even several months paying off bills from the holidays.   Once you know how much you can spend, your planning can begin.

2.  Make a list of everything that will impact your holiday savings fund.

Include travel to visit relatives, food, parties you want to attend or throw, presents, teachers and others you need to gift, charity donations, office parties, etc.  Don’t forget your children’s friends, too, if they exchange gifts.  Write down everything that you spend money on for this season that isn’t a regular occurrence.

3.  Break down your list of holiday expenses into three categories – Must Do, Might Do, and If I didn’t do this, nobody would notice. 

Must do usually included family obligations, your kid’s presents, etc. But even some of the things you’ve always done can be accomplished on a lesser scale.  Also, some of the things we do at the holidays are done out of habit, and if we didn’t do them, would anybody care?  Now is the time to figure that out. 

4.  Evaluate your Must Do and Might Do categories. Try to find ways to cut some expenses.

If you’re planning your annual holiday party, try having an Open House or Cookie and Hot Chocolate party instead of an evening shindig.  Most of your guests won’t notice, and many may be relieved they can drop by for an hour or two and get on with their holiday plans. After all, the holidays are a really busy time for everyone.

Gifts seem to be the biggest budget blower, and it really is easier to cut back on gifts than you might think.  Consider homemade gifts for teachers, neighbors, and some relatives and acquaintances.  Become known for that fantastic homemade jam that you gift at the holidays, and your recipients look forward to receiving.  A quick online search will provide you with hundreds of ideas for homemade gifts that are easy to make. 

For your kids, plan on one or two bigger gifts, and a few smaller ones.  Honestly, most kids don’t want, need, or enjoy having dozens of gifts to open, and nothing is special. 

For gifts to charities, consider spending some time volunteering instead of making a cash donation.  Most can use the help, and it will keep your holiday spirits alive.  Many will also accept older children as volunteers; this is a great way to teach your kids about the gift of giving and helping others.

If you travel for the holidays, start pricing tickets and hotels as soon as you can. Plan any air or other travel a 6-8 months in advance – the closer to the holidays we get, the more expensive travel will become.  Here’s a secret – unless you’re traveling to a very busy city or vacation destination, hotels are generally empty on the holiday.  Call them directly for a better rate.  You might be pleasantly surprised.  If you’re driving, make sure your car is up to the trip; if not, consider renting a car.  This is especially good if you have a long car trip.

5.  Shop smart!

Start now by buying some of the ingredients needed for holiday recipes, like flour, sugar, butter, etc.  If you have the storage space, purchase in bulk.  Start shopping for presents; at least know what they’ll cost, when you’re ready to purchase them.  Many stores will price match if you made a purchase prior to the sale; keep that in mind when buying now.  

6.  Stay on budget. 

Keep lists of what you have, what you need and where you have it hidden (presents) or stored.  Lists will become your friend; buy only from your list; if you find you have forgotten someone or something, add it to the list.  

7.  Avoid impulse purchases.

If it’s not on the list, don’t buy it, no matter how cute/special/good it might be.  If you normally take your kids shopping with you, and this is a problem (impulse buying) either explain that it’s not on the list today, or leave them home.

The hardest part about budgeting, whether it’s for the holidays, a vacation, or just month-to-month expenses, is that you can always find something to spend some cash on that isn’t in your spending plan.  These are true budget busters, and you need to train yourself to stick to your plan and stay on track.    

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