Posted By: Carly Lance
The holidays can feel like one big party. Going from house to house, exchanging presents and enjoying the company of friends is a blast. However, it’s easy to let go of your grasp on your wallet and spend way more than you meant to. Many people, even ones who are fiscally responsible, wind up spending too much money on holiday celebrations. If you want to reign in the cash-intensive merriment this year, here are a few tips for budgeting around the holidays:
Make a list and check it twice.
Before you spend a dime on the holidays, create a list of all the things you anticipate you’ll need. Include even small things like wrapping paper, presents for work gift exchanges and Christmas cards.
Decide how much money you have to spend.
Instead of dropping cash like it’s your job, first decide how much money you have to spend in total. Don’t worry about breaking it up into categories yet. Many people get in trouble by saying, “I’ll spend $50 on this and $50 on that.” Instead, come up with a round figure of your available funds first.
Assign your money to different categories.
Remember that list you made? Take the total amount of money you have and start assigning it to your various categories. This represents the maximum amount you have to spend in each category. If one area looks a little low, take money away from another category to make up the difference.
Decide on gifts.
Now that you know roughly how much you can afford to spend on gifts, you can start deciding what to get different people. Get creative with your gift giving. Delicious homemade treats are just as welcome as expensive presents around the holidays. Stay within your price range for each person. If you wind up spending more for one person, you’ll have to take that money from another category.
Search for sales, but don’t be ruled by them.
Holiday sales are so tempting. You might be able to get great deals on awesome gifts. However, if even the sale price is too expensive, then skip it. Don’t wreck your budget just so you can get one person a fancy new tech gadget.
Set realistic expectations.
The holidays are all about fun and family. If you find yourself getting too competitive with Christmas shopping, dial it down a notch. Remember, it’s not about getting everybody the best presents. It’s about finding something thoughtful. A handmade, handwritten card can be better than even the most expensive gift. Make sure your expectations are in line with reality. Communicate this plan with your family so you’re all on the same page.
Spending too much around the holidays is the kind of mistake you’ll be paying for all year, so think wisely before dropping your hard-earned cash on celebrations. Stick to these tips for creating a holiday shopping budget and you’ll be in much better shape on New Year’s Day.
Frugal may be her middle name, but Carly Lance does it with class – which is why she loves to write about saving money, to help others learn from her cheap (but classy!) ways. Carly is also a blog coordinator for Personal Bankruptcy Canada, a company of trustees that deals with bankruptcy in Canada – whom she also blogs about finances for.