Budgeting for Holiday

Take Free From Broke blog’s suggestions on planning your Christmas and Holiday season shopping budget:

1. First the real chore; you need to make a list of all expenses.  Notice I’m talking expenses here and not just gifts.  We tend to spend more than just on gifts, don’t we?  Do you have to travel at Christmas?  It may sound trivial, but even an extra tank or two of gas to drive around visiting relatives and can cost more than you think (and that’s considering driving not flying out somewhere).  How about special holiday meals?  You see where I’m going with this.  The point here is to figure out how much you’re spending before you even get to your gifts.

You need to figure out what you can afford!

Look at what you can realistically spend for the holidays.  Work out a total figure for this amount.  This will be after you’ve figured out what you’re spending for other holiday-related activities.  This is what you can afford for your gifts.

2. Have you saved anything yet for the holidays?  If you have money set aside for holiday shopping already then you are awesome!  (Listen, you’re awesome if you didn’t put anything aside too I just want you to get in the mindset of budgeting for stuff before it happens.  Are we cool?)

Now look at that figure you have for holiday spending.  Subtract the savings you set aside for gifts.  The amount that’s left is what you need to save between now and the holidays.

Note: Don’t go dipping into emergency savings and stuff like that.  Savings are there for a reason.  Usually that reason isn’t to blow it all on holiday gifts.

3. How many paychecks until the holidays?  Time is ticking and I want you to get saving ASAP!  From right now until the holidays how many pay cycles do you have?  There may not be many.  Take that final figure of what you need to save.  Now divide it by the pay cycles you have left.  That’s what you need to put aside every paycheck.

Is it too much?  Then you need to adjust what you can spend or find other expenses you can cut down for now.  It’s OK to sacrifice a bit for something you want.  If you have to scale back going out to eat or a few movies out then so be it.  Or you can lower the amount you have to spend this season.  That’s OK too.

4. Make a list of people to shop for and check it twice.  (See what I did there?  I’m here all week!)  When you’ve made this list – prioritize.  Who do you absolutely need to buy gifts for?  Really.  It’s easy to head out shopping then see the perfect gift for your neighbor’s cousin’s friend that you met once at a BBQ years ago.  It’s nice of you to think of her but that gift either comes out of your gift budget or it will hit your credit card.

5. Who’s been naughty and who’s been nice?  (I can be so punny at times.)  Once you have your list I want you to come up with reasonable amounts you will spend on gifts for each person.  Go ahead and pencil it in next to their name.

Add up all of those amounts.  Is it more than your figure from the previous step?  If so go back and play with the numbers.

And don’t forget about cards and gift wrap.  You’re going to need all of that too most likely.  That comes out of your budget.  That’s OK.  Remember the point here is to figure our what you can afford so you don’t have to dip into your credit cards and debt to get by this holiday season.  You can do it.  We’re doing fine here.

6. Where are you buying your gifts?  Discounts are out there to be had, including Free Shipping Day, among others.  When you have a list of gifts, do a little homework online and find the best prices and you will find you can save a lot and make your money go further.  What you’re doing here is making sure you can get the best bang for your buck.  What’s nice about this step is if you play it well you can find the gifts you want for less and end up with a little extra in your budget.  Yay!

Good luck!