Budgeting for Christmas is important. Here are some tips on how to prepare for the current holiday season, and ways to build a budget for next year.
The holidays are always thought of as the most joyous time of year but for some it can create a lot of financial stress.
Americans spend an average of $1,000 on holiday-related expenses. For those living paycheck to paycheck, this is a substantial amount.
So what can you do if the holidays are fast approaching and how can you be more prepared for next year?
If the holidays are close by..
Realize how much money you have to spend.
Without going into debt.
Do the math and find out how many paychecks you have left in order to complete your holiday spending.
After making sure all of your bills and necessary spending are taken care of your leftover income can go towards your holiday budget.
If you can allocate $50 per paycheck and you get paid 4 more times your Christmas budget would be $200.
What if your Christmas budget is tight?
If I’m being honest you have to get creative.
Bringing in a side income is an option but there are ways around that if you are unable to earn extra money.
DIY gifts are great and way more thoughtful.
Crafting and baking are some of the most popular and if that interests you Pinterest can be a great help.
But what if your not the best holiday baker?
Remember there is such a thing as no bake desserts!
Here are some creative tips…
A great gift can be giving your time or a service to someone.
Make a coupon book and add some of your family or friends favorite activities.
Offer a pamper night with your daughter where you paint nails and do each other’s hair.
A movie night with popcorn and ice cream. Or maybe a day to build a fort or go for an outdoor picnic.
You could offer to volunteer with someone or even babysit for a night.
Gift your parents a day where you come and deep clean for them or organize their pantry or closet.
Put together, recipe books, picture collages, shadow boxes, or video memories.
Don’t forget the dollar tree can be a great place to start in order to keep your crafting or baking on a budget.
This is a great idea for something small that can cater to any budget-
Also, get yourself organized.
Being unorganized and unprepared is only going to make the season feel more stressful.
Sit down and figure out who you absolutely have to buy for.
If you have younger children and they are your top priority be open and honest with others in your life about the expectations of gifts.
Don’t forget to go through your house and see if there is anything you can sell.
The goal here is to buy anything you may need for the season with cash.
So many Americans go into debt for the holiday’s which makes for a not so great rest of the year.
And then it happens again. Year after year.
If you have already started your financial journey and the holidays are fast approaching you know how important it is to have a debt free Christmas.
If you weren’t able to prepare ahead of time pause your financial goal and cash flow everything.
Don’t feel bad about putting less towards your current baby step because the goal here is to stay out of debt.
Your financial journey can resume in January with no extra stress.
So what if you are reading this in January?
Perfect!
You have just about an entire year to set yourself up financially for a successful holiday!
Really you can do this at any point if you have more than a few months to save.
Starting a sinking fund will be the easiest way to ensure you have the amount you want come the holiday season.
Another great option is requesting your work to withhold a certain amount from each paycheck. Which is just another automated version of a sinking fund.
You can stash away cash or create a separate savings account through your bank or by using an online option like Ally or Capital One 360.
So if you know you have a decent amount of time to save, how do you know how much you will need?
What to budget for when planning for Christmas:
- Gifts
- Wrapping supplies
- Extra groceries or baking supplies
- Travel
- Giving
- Decor
- Shipping/postage
- Gas
- Parties
And if you are not sure of the correct amounts use your best judgement.
Maybe research on average how much your travel tickets cost.
Set a limit for spending on friends and family. Try and purchase wrapping supplies during the end of season sales.
In order to ensure you will have enough come shopping time divide the amount you need by the time you have to save.
If you want $1,000 saved in 10 months. Save $100 per month.
It is truly that simple.
Remember not everything needs to be saved prior to if you are someone with good control over your money.
Maybe you want to have all the money for gifts set aside but food and alcohol you will cash flow.
I started my debt-free journey in September only giving me a few months to save for Christmas.
Michael and I set a budget for each person and stuck to it.
We cash flowed any food, travel, and wrapping expenses (we don’t travel far). And any new decor I wanted I used my personal money to buy.
The second-year we saved everything we needed in just one month after becoming debt-free. We were debt-free in May and had Christmas fully funded by June.
Every year after we have cashed flowed everything Christmas related.
Remember if you want to win with money you need to be prepared.
That means planning, organizing, and paying attention to where your money is going. Not wondering where it went.
If this holiday season was financially stressful for you know it doesn’t have to be.
Realize you can get your spending under control. You can have an affordable financially responsible Christmas without going into debt.
Don’t let your financial mistakes during the holiday season carry through the rest of the year.
Christmas is not an emergency or a surprise and yet we seem to be blindsided every year!
Interested in more budgeting tips?
What to know before starting a debt free journey
How to pay off debt in the new year
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