Holiday budgeting tips

7 Holiday Budgeting Tips To Help You Stay On Track Financially

The season for giving is upon us. Even with the joy of the holidays, there can often be a source of stress: paying for all the things the seasons brings. People often worry about how they are going to afford all the fun. From gifts and parties to events and dinners, the bills stack up. No one wants to be perceived as a Scrooge to their family and friends, but does anyone really want to spend more than they can afford?

Luckily, we have some tips to help you get through the holiday season without breaking your budget and, if you plan accordingly and execute effectively, you can be generous while saving yourself from the lean months after New Year’s Day. Here are 7 simple but effective steps for budgeting for the holidays.

Create a list of your holiday expenses

Though your expenses will probably be different that anyone else’s, the result will be the same: you will spend money this holiday season. Whether you’re participating in a white elephant gift exchange or hosting a dinner, expenses can add up. Rather just hoping it all works out in the end, you can play an active role and make sure that doesn’t happen.

Creating a list of your holiday expenses is one of the most important steps you can take when budgeting for the holidays. Without a list, it’s harder to keep track of your expenditures, and things can escalate past what was intended. This results in using credit cards and taking on debt or just simply running out of money. A helpful tip is to start broad by thinking of all of the categories of expenditures. After you do that, you can get more specific about all the various line items in each category.

Decide your spending limit

Once your list of expenses is created, you can start getting a general idea of how much your holiday season will cost in total. Though looking at all the stuff that needs to be done and the associated costs may be daunting, it is important to set a spending limit based on your financial situation. In other words, how much money are you willing to spend on the holidays overall so that you feel comfortable entering 2019? Make it a reasonable amount and make sure you do NOT exceed it under any circumstances.

Assign money to each of your listed expenses

Once you have a total amount, you can then assign a specified amount to each of the categories on your expenses list. This will help you to stay within that budget. Limiting yourself to a predetermined amount may also inspire creative solutions or originality on your part, while also appearing thoughtful in the process.

For example, if you’re hosting a holiday get together and you’re planning on preparing a big dinner you can look for holiday bargains and sales, clip coupons, or ask your guests to bring a side dish to the dinner. Don’t worry, almost everyone is willing to bring a side or a dessert when they’re invited to dinner. On the other hand, if the brisket dinner is going to break the budget, try a holiday chili or roast.

To stay within your budgeted amount for gifts, you can think of all of the individuals you plan to buy gifts for and assign them each a budget. Sometimes, based on what items and/or sales you can find, you won’t even reach an individual’s budget limit. In fact, a thoughtful and personal gift can often be less expensive and more appreciated than an expensive one.

Create shopping lists

Shopping lists are a great tool for sticking to your holiday budget. By creating a list, you know what you are going to the store for and can search for just those items rather than browsing and impulse-buying things you don’t need.

In some cases it makes sense to be a little more lenient when browsing with your shopping list. For example, you may not always know what you are getting someone for a gift, but you have a general idea. By designating a predetermined amount of money to spend on each person while leaving your options open, you can have the leniency you need for being creative and thoughtful in your gift giving and still stay within your budget.

Tip: A great way to make sure you stay on budget while shopping is to go to a cash-only system. Leave your credit cards at home so you can’t spend any more money than you have in your wallet.

Save money any way you can

The most common ways to save money are shopping for sales, using coupons, and buying second-hand. However, there are also other a few less familiar ways to save money for the holidays to help you meet your budget, such as:

  • You can start putting all your spare change in a makeshift piggy bank (you may be surprised how quickly it adds up!)
  • Sell some stuff you no longer need. Other people are often looking to buy second-hand, so it can be pretty easy to make a few extra bucks.
  • Work side projects. Do you enjoy doing DIY projects? People often look for unique gifts, so you can try selling some of your projects online to make some extra cash.
  • Sacrifice your daily latte for your holidays. If you give up your daily latte for the holidays, you can easily accumulate some extra spending money. At $5 per day after tip, you could be saving $25 per week or an extra $100 per month!

Track your expenditures

This step is absolutely one of the most important when budgeting for the holidays. Tracking your expenditures is the only way you’ll make sure you stay on budget. Furthermore, if you find that you were able to get away with spending less on food or travel, you can either spend the surplus on one of your other listed holiday expenses, or you can squirrel it away into your savings account.

You can use an Excel sheet to track your purchases, a Word document, or even good old paper and pencil to keep track. The point is to stay within your budget, and tracking your expenditures is the only way you’ll know if you’re doing exactly that.

How to get ahead of the game for next year

After the holidays are over you may want to forget about the chaos of shopping and budgeting. But before you do, here are a few ideas you can implement to put you ahead of the game next year.

Start saving in January

Even putting a little bit away each month will add up quickly over the course of the year, and when the holidays come, you will be ready. Even $25 per month will leave you with close to $300 come next December.

Take advantage of rewards credit cards

Several credit cards out there offer cash back rewards, among other rewards and the advantages add up quickly over the year. However, this strategy does not work in your favor unless you pay off your credit card every month. If you cannot pay off your credit card each month, do not do this method.

Create a special holiday savings/investment account

These accounts have become increasingly popular. They are simply a separate savings account, CD, or short-term investment, which are specifically used for saving and/or growing money for holiday expenditures.

Start shopping early

Though this can be difficult for most people,shopping for the holidays (especially for presents) year-round can be one of the most effective methods in keeping to a budget for the holidays. Not only do you spread out your expenditures over the course of the year, but you can also buy items on your list when they go on sale. You will have more opportunity to catch those sought-after items on sale over the course of a year versus hoping to see it on sale in the last couple of months of the year.


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RedFin and Eagle Financial Solutions are separate entities and have no affiliation.


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