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.

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