Creating a Wise Christmas Budget

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Creating a Christmas budget

Christmas is a retailers dream, the credit cards companies bread and butter, and nightmare for families just making it. The extra expense of the holiday combined with time off and the pressure to meet status quo can be debilitating to families across the nation.  Today I want to share with you how to create a wise Christmas Budget but first a few stats.

“According to figures derived from a national survey completed by Prosper Insights & Analytics, the average consumer plans to drop a cool $935.58 on gifts, food, cards, postage and decorations for Christmas, Hanukkah and Kwanzaa this year”

In the Get a L.I.F.E. Tribe I took a poll and asked about the families typical tendency for Christmas Spending:

  • 45% tend to overspend 
  • 36% stick to their budget
  • 1% does not keep track of spending
  • 1% struggles to find the extra money for Christmas

Some of the takeaways from this data are clear most people overspend on the holiday and the price tag for Christmas keeps going up each year. So how do we combat this so we don’t have a Christmas “Hangover”? Creating a Wise Christmas Budget!

Step one to creating a Wise Christmas Budget is to PLAN EARLY!
Fear, anxiety, and lack of a working budget keep most people from starting yearly. It is easier to wait until the last minute and put off paying a bill or swiping a credit card than it is to discipline yourself and put $50 in savings every month for Christmas and KEEP IT! However, starting early is the only safe way of knowing you will have enough money.

Step two to create a Wise Christmas Budget is to know who you are buying for.
This may sound simple, spouse, kids, parents….but one common thing that happens is last minute someone buys a gift for you and you feel like you need to return the gesture OR you just get in the spirit and want to give. For this reason, I list all of my family, co-workers, church friends, teachers, Sunday school workers, and bus drivers, anyone that I may receive a gift from or want to give to. (Side note: this is normally well over 30 people…my trick is that most of my gifts outside the family are food or handmade gifts).
The third step to creating a wise budget is to assign each person on your list a money amount.
This process will help you determine how much to save for step one. This step is also one of the trickiest. Do my children have to have the same amount of money spent on them? How do I know what the gift I am going to get someone costs?  I don’t make enough to cover the cost of my list?
The questions could go on and on. That is why completing this step is so important. I can’t tell you all the answers but I can make some suggestions.

  • Your children should have a set money amount and gift amount.  If we hit the gift amount before the money amount we are done or Vice Versa.
  • As for a gift list early! I send out an email in August or September and I keep a running list of gift ideas in my planner. People mention things all the time “man I would love to have that!”. Just take note. 
  • Do your research. Spend some time pricing things online. Also, make sure you are looking at reviews, competitors’ products, and similar items that may be a little cheaper. 
Step four don’t forget to budget for the Christmas items that are not gifts!
I call this the forgotten step. Christmas automatically comes with additional expenses like decorations, food, travel, photos, and more! Don’t get caught just planning for people gifts.

The Fifth Step in Creating a Wise Budget is to decide how you save the money.
I bet you thought I was done. Nope. If you do not plan the execution of saving the money you won’t! Now you have to look and see where the money will come from, how often you will save towards the Christmas budget, and where the funds will go so you don’t spend them.

I have written a 4 Part Series entitled “How to Save on The Holiday’s” If you are in a position that you cannot spend a large amount on Christmas this series will be very helpful for you!

Saving Money on travel during Christmas
How to Save on Travel

Now I want to hear from you do you tend to overspend on Christmas, underspend on Christmas, struggle to find the money, or not track your spending at all?

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creating a Christmas budget

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