With the holiday season approaching we tend to spend over our budgets to try to buy the perfect gifts. Take time to put together a financial holiday budget. Here are some guidelines to assist with this process.
- Set a Total Spending Limit
Pick an amount you can realistically afford without going into debt.
A good rule:
- Take your monthly disposable income
- Subtract regular bills and savings goals
- Whatever is left—use only a portion for Christmas
Example:
If you have $600 leftover each month, you might choose $300 total for Christmas spending.
- Break That Number Into Categories
Most people spend in the below categories. Write a quick list of your categories and assign a dollar amount to each.
Example on a $300 total:
- Gifts – $180
- Food – $50
- Decorations – $20
- Events – $30
- Giving – $20
Try to remember what you spent the year before to get good ideas of your expenses.
- Make a Gift List (Before Shopping)
List everyone you plan to buy for and set a dollar limit for each person.
Set firm caps like:
- Kids: $30 each
- Sibling gifts: $25
- Friends: $15
- Spouse/partner: $50
This instantly stops overspending.
- Use Cash or a Separate Card/Envelope
To prevent going overbudget:
- Put your Christmas money aside in cash,
OR - Use a separate card or dedicated bank account just for holiday spending.
When it’s gone, you stop.
- Track Every Purchase
Just write it in your phone notes:
- “Gift for Tina: $18”
- “Wrapping paper: $7”
Seeing the running total keeps you in control.
- Use Simple Ways to Cut Costs
- Give family group gifts instead of individual gifts
- Do name-draw exchanges
- Make homemade treats instead of pricey presents
- Make a craft for a gift
- Buy during Black Friday/Cyber Monday or post-Thanksgiving sales
- Reuse last year’s decorations
This type of cutting back can make a tremendous difference.
- Plan for Next Year
Starting in January, put away:
- $20 a week, or
- $50 a month
By December, you’ll have $500–$600 for Christmas with zero stress.
