How to Budget for the Holidays

by Chris on April 26, 2013

Many people struggle with how much money to spend during the holidays.  Making a holiday or Christmas budget is a great way to help you control costs during these times.  What people don’t understand is that a holiday budget includes much more than just presents.  Let’s take a closer look at the things you should look at when making a budget for the holidays.

Quantify Your Holiday Budget.  This is something most people already do.  For example, our family sets a dollar amount per person for buying gifts.  Some families set an overall dollar amount to make their holiday budget.  This is the part that most people do, but this is also the place where most people go wrong. Budgets get out of control mostly because people spend more on gifts, buy gifts for more people, or don’t take into account the other ways that they spend money for the holidays.  Here are some of the other spending that you should include in your budget.

Presents and Gifts.  Gifts are one of the larger expenses for many families.  Most people start with a ballpark budget for gifts and then, as the holiday gets closer, they get excited and outspend their gift allotment.  In my case, when I struggle finding a gift for someone, my tendency is to increase the price range.  Also, I’ve gotten into trouble some years when I started buying gifts for people like teachers, mailmen or friends.  Keep your gift giving simple and set hard and fast budgets and you can help reduce overspending.

budgeting for the holidaysFood.  Food is sometimes the biggest expense for some families and is often overlooked when creating a holiday budget.  Not only do people splurge on buying treats and exotic foods, but people tend to go out to eat more often during the holiday season.  Also, when it comes to Christmas parties and other events, it’s easy to drop a few hundred dollars on food for a party that you don’t even consider a holiday expense.

Decorations.  Don’t forget to include decorations, lights, flowers, Christmas trees and ornaments as part of your holiday budget.  These costs can add up quite a bit if you don’t budget for them properly.

Christmas Cards.  Sending out holiday cards can be very costly.  Especially if you make custom cards and have a big list.  The stamp price alone is nearly $50 for every hundred you send.

Things You Buy Because You’re In a Good Mood.  I find that when I am out holiday shopping and enjoying all of the decorative shopping malls and store displays, that I am more likely to spend money.  I feel like the holiday itself is a way to justify spending more money.  Try not to let this happen and you can help save your budget.

Going Overboard.  As the holiday gets closer and you see your kids excitement levels rising, don’t go overboard.  Don’t try to outdo the gifts you gave your girlfriend or spouse last year.  Going overboard can end up costing you more money every year, because expectations get set and you can’t afford to disappoint.

Do you have some tricks that help you stay on budget during the holidays?  Please share them if you do.

{ 7 comments… read them below or add one }

Grep June 13, 2013 at 6:34 pm

Involve the kids! This is one of the easiest ways to bring costs down. Hand-made gifts (especially ones which can be saved for memories) are even more charming when made by your kids. My teens still get a kick out of making things like personalized tree decorations (w/pictures, names, etc.). And of course, the little ones love crafting — and bragging about what they’ve made. Also, you’re spending quality time together and making memories. You can’t go wrong with that!

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christa June 17, 2013 at 4:47 am

I agree on this one, i love to make hand made gifts as for its much cheaper and the kids realy enjoying it!

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kim June 18, 2013 at 2:56 pm

Every year we would buy gifts for our brothers, sisters and in-laws at Christmas time. Everyone decided two years ago that this was an expense we could do without. It was too hard to keep within the allotted budget per person and seem to get more expensive as the years went by. This saved money and frustration for all us.

Potluck for those special occasions is also a great way to save money and not leave the host with purchasing and preparing all the food. We would prepare a dish at home and bring it with us to the party. This way everyone contributed to a great meal and the host was not as stressed and worn out for the party.

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Donna9376 June 20, 2013 at 2:29 pm

I agree with you all. The holidays are becoming a very expensive time of year. Me and my family always did the same thing and bought gifts for everyone. Nowadays we have all decided to just buy for all the children in the family. We all tend to let the kids enjoy Christmas and us adults enjoy bringing in the New Year.

I love getting a big roll of brown paper, a glue stick and some glitter. It’s a cheap way to keep the kids quiet for hours.

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Happyflowerlady June 29, 2013 at 1:53 pm

I have really cut back on holiday spending, and I think that most people are doing the same thing, with the slow economy. We usually do not travel during the holidays anymore either, and using FaceTime is a great way to visit with my kids and grand kids , and it doesn’t cost anything, so it can be done as often as you want to.
I enjoy knitting and crocheting, so I usually make knitted slippers, or a little crocheted rug, or maybe a pair of socks, for people on my Christmas list. They last a long time, and are great for the cold winters , and are something that you can’t just go to Walmart and find on all the shelves, so it is a very personal gift, as well. In fact, I am usually getting requests ahead of time for color of slippers, and such.

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brooke0309 June 29, 2013 at 4:28 pm

We too, recently switched to only buying for the kids in the family.
I can honestly say that I enjoy watching them open presents more than I enjoy presents of my own!

I also started buying all of my gift wrap and new holiday decorations after the holidays! I have found that, for the most part, all of the adorable gift boxes and decorations that I used to buy just because they made me happy, were still available the day after Christmas but with a nice 50% off sticker slapped on the front!

The holidays really did become extremely overwhelming once we had kids, so after the shock value that we faced when looking at our bank account after our son’s first Christmas, we immediately decided to start saving for Christmas in January!
We set a budget for the holidays at the first of the year and we do a quick crunch of the numbers to see what we need to set aside out of each paycheck to cover our budget.

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limcid July 16, 2013 at 2:06 pm

I’ve created a spreadsheet that allows me to set goals and then view how much money I need to set aside each day to meet those goals. Everything adjusts as time marches on so I always have an accurate view of how realistic my goals are. This is great for all bills, savings, etc.

For something like Christmas, you could easily only have to set aside a few dollars a day to meet your goal.

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