10 Tips for Creating (and Sticking to) Your Holiday Budget
Ho, Ho Ho, Holy Shit. Where’s the Tylenol?
42% of Americans go into debt for the holidays. That’s not going to be us.
You deserve to have a holiday season that’s merry and bright and won’t leave you saying WTF have I done!? when that credit card statement arrives in January.
It’s time to make a list and check it twice because this year you’re going into the holiday season with a plan (and sticking to it!).
10 Tips for Creating Your Holiday Budget
1) Start as soon as possible
Seriously, the sooner the better for this one. Ideally, you would’ve started budgeting and planning on, like, December 26th of last year, but if you didn’t, don’t worry. All is not lost.
You can start now!
2) Make a detailed shopping list
People spend an average of $1,800 for Christmas and Thanksgiving!
But this is just the average.
Go back to see how much YOU actually spent last year (yes, actually go back through your bank statements and total it up).
Then, think about what it will look like this year.
Are you going on a trip? Are you hosting Thanksgiving this year? Buying new decorations? Hosting a White Elephant party? Foregoing gifts altogether?
Make a list of everyone you want to buy for this year and allocate a dollar amount to spend on each person. And don’t forget to include those people we shop for but often forget about until the holiday season rolls around like teachers, secretaries, and postal carriers!
And while you’re making your list, don’t forget to account for non-gift items like decor, gift wrap, travel, and parties.
Whatever your plans for holiday spending are this year, come up with realistic figures for you.
3) Remember that your friends and family don’t want you to go broke
Do not, I repeat DO NOT, go into debt or squander your savings trying to show your family and friends how much you love them.
Some people’s love language is giving gifts.
Some people prefer experiences over gifts.
Some people love DIY gifts.
Whatever makes you happy is what you should do.
But trust me when I say, your friends and family do not want you to go into debt for the holidays.
Spend until your heart's content, but make sure you’re not overdoing it. You know how much you can afford and you know how much you’ve set aside for Christmas.
If you are feeling a little tight, have an honest conversation with your family and friends and set the expectations now. Chances are they probably feel the same way. Set those boundaries now!
Maybe you got a late start on saving and planning this year which means you might have to scale back for just this season. That’s OKAY!
There truly is no greater joy than financial freedom. Give yourself and the ones you love the gift of the peace of mind that comes with being debt-free!
4) Set a limit and stick to it
This may be the hardest part. Even if it’s tough to turn things down, it’s much better to do so than end up resentful when we’re in the midst of a trip to the beach with our friends or family.
You’ll be much happier declining an invite to a party, saying no to participating in the office Secret Santa, or choosing not to travel out of town to celebrate with friends and family because it’s not in the budget rather than agreeing to all of that (or more) and resenting the whole experience when the time comes.
Or worse, feeling that resentment when the credit card bill comes and you’re stuck eating Ramen for breakfast, lunch, and dinner even though your New Year resolution was to eat healthier.
5) Shop smarter
You really can stretch your dollar this holiday season without feeling like you have to sacrifice everything that brings you joy. Try these tips to shop smarter:
🛍️ Shop early and/or buy a little throughout the year.
🛍️ If you need new decor, wait until after the holiday to snag your faves on deep discount
🛍️ Pay attention to sales like Black Friday and Cyber Monday, but also after the holidays sales to get a head start on next year
🛍️ Utilize cash back programs, apps, and cash in on your credit card rewards
6) Keep track of spending
Track all of your spending. This will help you stay on budget and know exactly how much you should count on saving to prepare for the next holiday season.
7) Avoid last-minute panic shopping
Remember that “last minute gifts” is just a fancy marketing term to get you to buy sh*t you don’t need and weren’t planning on buying in the first place.
Put those Chapsticks and fuzzy socks back and step away from the Target Bullseye.
8) Look for ways to free up your budget
Check out your budget to see what you can cut to free up some extra cash for the holidays. This could be a subscription you don’t use or you could press pause on saving for something that’s further down the road.
You might also consider getting a side hustle to help bring in some extra cash during the holidays.
9) Rethink tradition
Just because you’ve always celebrated in a certain way doesn’t mean you always have to.
It may be time to reevaluate your holiday traditions to think about the true cost of how you celebrate the holidays from a financial, emotional, and physical standpoint.
10) Open a dedicated savings account and automate transfers
Open a high-yield savings account and set up automatic transfers so that you’ll not only have a little $$$ each paycheck (or however often you want to save) automatically going to an account dedicated just to holiday spending, but it’ll also be making money thanks to our bestie, compound interest.
Plus, this will help you resist the temptation of dipping into your Christmas fund for other purposes. Out of sight, out of mind until you need them!
Better Budgeting Habits All Year Long
Practicing smart budgeting for the holidays sets you up to be successful at budgeting all year long. Come January 1 when you’re all #NewYearNewMe, you’ll be ready to take on a year of smart spending, saving, and investing.
Follow these steps to build better budgeting habits:
Define your financial goals
Review your budget and make necessary changes (especially as inflation continues to chip away at our funds)
Set up sinking funds for things like birthdays, holidays, salon and spa services, pet needs, etc.
Avoid impulse shopping (sorry, Ariana Grande, we cannot just see it, like it, want it, get it, baby girl)
Track all spending
Keep track of gift spending all year long
FREE Holiday Budget Tracker
Looking for a FREE holiday budget tracker to help you actually stick to your holiday budget? I’ve got you! I’ve created a brand new budget tracker just for the holidays.
