Unlike some of you whom may already have your holiday shopping complete, most Americans don’t start until October or even after Thanksgiving. So, creating a holiday spending plan is a smart way to ensure you enjoy the season without overspending. Here’s a step-by-step guide to help you create a holiday spending plan that works:
Set a Budget
- Determine Total Spending Amount: Decide how much you can afford to spend overall. This should be based on your financial situation, factoring in other regular expenses and savings goals.
- Stick to the Budget: Be realistic about what you can afford, and make a commitment to stick to it.
Make a List of Holiday Expenses
- Categorize your spending to get a clear picture of where your money will go. Common holiday expenses include:
- Gifts: For family, friends, coworkers, etc.
- Holiday Meals: Food, drinks, and any dining out.
- Decorations: New decorations or replacing old ones.
- Travel Costs: If visiting family or friends out of town (flights, gas, accommodations).
- Entertainment: Events, parties, holiday movies, etc.
- Charitable Giving: Donations to causes or organizations.
Prioritize Your Spending
- Rank expenses by priority. Are gifts the most important? Or travel? This will help you allocate your budget accordingly.
- If your budget is tight, you can decide where you can cut back, such as fewer decorations or hosting a potluck dinner to reduce food costs.
Research and Compare Prices
- Shop Early: Begin early to avoid last-minute price hikes and to take advantage of sales.
- Use Coupons and Discounts: Look for deals, cashback offers, and coupons.
- Track Prices: Use apps or websites to track and compare prices to make sure you’re getting the best deals.
Allocate Specific Amounts to Each Category
- Break down your total budget into categories:
- Gifts: $X amount
- Meals: $X amount
- Travel: $X amount
- Having specific amounts for each category will help you track your spending and avoid going overboard.
Track Your Spending
- Use a Spreadsheet or App: Track how much you’re spending in real-time, ensuring you stay within your budget for each category.
- Receipts: Keep receipts to compare against your budget.
Consider Non-Monetary Gifts
- DIY or Homemade Gifts: Handmade items, baked goods, or even offering your services (like babysitting or running errands) can be thoughtful and budget-friendly.
- Gift Exchanges: Suggest a family or group gift exchange (Secret Santa, for example) to cut down on the number of gifts you need to buy.
Build a Buffer for Unexpected Costs
- Set aside a small portion of your budget (around 5-10%) for unforeseen expenses, like last-minute gifts, invitations, or holiday mishaps.
Plan for Next Year
- Start saving early for next year’s holidays. Set up a holiday savings account and contribute to it monthly, so by the time the season rolls around, you’re financially prepared.
Sample Holiday Spending Plan:
|
Category |
Budget Amount |
Actual Amount Spent |
|
Gifts |
$500 |
|
|
Travel |
$200 |
|
|
Decorations |
$100 |
|
|
Meals & Entertaining |
$150 |
|
|
Charitable Giving |
$50 |
|
|
Miscellaneous |
$50 |
|
|
Total |
$1,050 |
This plan gives flexibility while providing a clear path to stay on budget.
Would you like help customizing a plan for your specific needs? If so, contact us.
