As the weather is getting cooler, it’s natural to start thinking about the holidays. Gift giving, meals, parties. But have you budgeted for the holidays yet? Ideally, we would be setting money aside all year for Christmas presents. If we did, we could take advantage of sales when we see them. We could also get through the holiday season by paying cash, never having to use a credit card. That is the best way to avoid having that post holiday hangover that occurs as soon as January’s credit card hits your mailbox.
If you haven’t been saving for months, it’s definitely time to sit down and create a holiday budget. You need to decide how much you can afford to spend over the next three months, what you will spend it on, and stick to it. Once that budget is set, don’t let anything throw you off. The best way to enjoy the holiday season is when you are being financially responsible. Overspending money feels just as rotten as overdoing ourselves physically. It’s depressing and exhausting.
First order of business: decide how much money you can realistically and responsibly dedicate to holiday budget spending. This isn’t building a budget around what your children have asked for. This is building a budget around what you can afford. Once you have that amount, you can decide how to use it. But changing that number is off limits.
As you are building your holiday budget, keep in mind that gifts are only part of the added expense this time of year. Here’s a list of the typical expenses that come up during the holidays:
Gifts, of course. These would be the gifts you normally buy for you family. Also remember to add in gifts you give to neighbors, coworkers, office exchange gifts, and the little things you hand out to your newspaper carrier, teachers, hairdresser, etc. Do your kids exchange gifts with friends? If so, include that in your budget.
Parties. Do you need clothing for the office party? Do you have to pay for tickets, drinks, a taxi?
Postage. Remember to add stamps for cards and shipping costs both to your home and for shipping out gifts you are giving to your budget.
Travel. Are you going to Grandma’s for Thanksgiving? How about Christmas travel? Do you need to pay for pet care while you’re gone? Even if you are only taking day trips, there will be some expense involved.
Donations. Organizations use the generosity of the holiday season to push for extra donations. If you usually choose to give more during this time, budget that in. We are also asked to donate more items during the holidays, so take that into consideration.
Baking. Ingredients you use for baking often aren’t things that you stock all year.
Tape, ribbon, wrapping paper. It’s surprising how the cost of these supplies add up.
Activities. Do you buy tickets for The Nutcracker?
Meals. Holiday meals usually go above and beyond your normal food budget, especially if you are hosting.
Once you have set a realistic and livable holiday budget, make sure you stick to it. It’s okay to pull back on holiday traditions this year if they don’t fit into your budget. Your holidays will be much more enjoyable if they aren’t spent worrying about how you will pay for them. Let’s start planning now so that we aren’t sorry later.