How to Budget Now for the Holidays

holidaysDon’t let the holiday season catch you off guard without having prepared to cover the costs that pop up during this time of the year. Setting aside a few hours to look over your budget and your intentions for spending over the holiday season will help keep you in good financial shape at the start of the New Year.

The holidays will be here before you know it, but you still have time now to budget for the holidays.

Crunch Your Numbers

If you spread out your holiday purchases over the course of several months, you’ll lose perspective on how much of your income you’re actually losing to the holiday mania. You may think you haven’t gone overboard, but too many small purchases here and there can really add up.

To avoid spending more than you intend to spend, look at your pay checks and decide what percent of your income you’re willing to spend overall on the holidays. If you make $45000 a year, and you don’t want to spend more than 1% of your income, then set aside $450 to spend on every purchase for the holidays.

Create Your Grocery List

Wine, seafood, pecans, and special-order cakes and pastries are typical holiday fare. Holiday meals are known for their extravagance and splendor. Families tend to go all out on holiday meals, buying whatever they need to make the dinner special.

However, going overboard usually means going over-budget. Don’t feel guilty for spending more money than usual to create a special meal for your family. Instead, write out your complete grocery list now so you will know how much money you need to set aside for your holiday meal. Using a grocery app can help you keep track of what you will need and how much it will cost. Budgeting ahead of time and setting aside the money for your holiday meal will take all guilt away for going overboard on your spending.

Write Out a Complete List of Recipients and Gifts

Don’t be tempted to throw caution to the wind when buying holiday gifts for people. Be methodical in your purchases, and have a plan so you don’t overspend on gifts.

Create two lists of recipients: people receiving a home-made or well thought out gift, and people receiving a friendly gesture gift. Kids, spouses, parents, and siblings all go on the first list.

Decide how much of your Christmas budget will be spent on everyone getting an individualized gift and plan your gift purchases for them according to your budget. Then look at your other list and decide how much money total to spend on a “gesture gift” for everyone else. For a gesture gift, try to think of inexpensive gift ideas that will show everyone on that list that you appreciate them and are thinking about them over the holidays.

Earn Extra Money to Cover the Difference

If you look at your budget and decide that 1% of your income isn’t enough for the holidays, make extra money to cover the difference between what you can spend and what you want to spend.

Look around your house and see what you have that you could sell on eBay or Craigslist for some extra cash. You could also make extra money online by signing up to do surveys or doing your shopping through Swagbucks. If you have extra time at night or on the weekends, apply for a part time seasonal job. Retail stores, Christmas tree lots, and shipping companies usually look for extra help this time of the year.

Enjoy the Holiday Stress Free

By crunching your numbers and having the money on hand to spend for purchases, you won’t be putting yourself into credit card debt for the holidays. Knowing how much you can spend and how much you’re willing to spend will let you enjoy this special time with family without stressing about how you’re going to be able to afford it all.

How do you plan and prepare for the holidays?

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