With the holiday season upon us, one of the questions we have seen start to pop up more frequently is “How do I budget for the holidays?” The simple answer is 1) to actually have and stick to a budget, and 2) to start early. While it may seem simple or straightforward, putting it into practice can be much different.
If you want to budget for the holidays, of course you are going to have to have A BUDGET. We’ve talked before about the importance of a budget (or spending plan) for your everyday living, and the same applies when it comes to those year-end gifts, otherwise your spending can get away from you quickly! When coming up with that holiday budget, find a figure that you are comfortable spending on gifts across the holiday’s and then stick to your guns. Also, make sure you are considering all of those areas that you might get gifts for, it may not just be Christmas with your immediate family. There are things like holiday parties, work gifts, we have a big family so there are cousin gifts exchanges, and also be mindful of any birthdays that may land in December. See, it’s pretty easy for that number to grow quickly!
Also, you know that if you’ve convinced your wife to let you buy a new motorcycle in October, then your “budget” for Christmas will likely relegate you to new dress socks just so your kids can get you something. It’s important to be realistic with your holiday budget so that you don’t undo all of the work you put into your spending plan the other 11 months of the year. It might go without saying, but you also need to make sure you are tracking that spending so you know where you are on your budget.
The second part of budgeting for the holidays is to start early, and no, you can’t start too early! Starting early allows you to spread out the expenses over a longer period of time rather than squeezing all of those gifts into the last month of the year. It also gives you the flexibility to catch some really good sales! Earlier in October, Amazon had Prime Big Deal Days, not to mention Black Friday and Cyber Monday which seem to now span the entire month of November for most of your online retailers. If you are able to plan and budget appropriately, you may be able to get those White Elephant gifts in October (on sale), gifts for your in-laws and some of your gifts for kids in November (also on sale), and then finish out any other gifts you need with the budget you have left in December.
Another perk of starting early is it can help relieve some of the stress that can come from trying to squeeze all of the gifts getting in late, when your kids may also be out of school. Of course, this can also create the issue of now having to store/hide presents for an extended period of time, and I think we all know of someone who makes it their life’s mission to figure out their gifts ahead of time. I also know someone who would forget that they already purchased and hid gifts until she found them…3 years later when trying to hide new gifts!
One bonus tip – if you like the idea of spreading the total cost of holiday gifts out even more, set your budget for 2024’s holidays after you see how much you spent this year and start saving for it in January. Earmark an account at your bank for gifts and if your budget was $2,400, start to save $200 per month into that account to make the end of the year easier on your purse. (I know the phrase is easier on your wallet, but let’s be real, it’s our wife who ends up doing most of the Christmas shopping!)
Ultimately, like with most other things concerning your financial life, it’s finding what works best for you and your family. If you’re not much of a gift giver, or you may not have a large extended family, then planning for gifts may not be a big deal. But above all else, just make sure to enjoy the holidays because presents ultimately don’t matter, but time together does!
Image by cookie_studio on Freepik