This week, I wanted to talk all about holidays. Thanksgiving is next Thursday and… well, we all know how quickly the holidays are upon us after that. So, today, let’s talk all about holiday budgets and how to create them.
First, make a list of categories for your family’s holiday spending. Usual categories are things like gifts, gift wraps, holiday cards and postage, holiday family photo, holiday meals, baking, decorating, and travel expenses. Determine every area that you normally spend and try not to leave anything out.
Next, determine a bottom line. How much do you feel comfortable spending overall? Once you have that number figured out, you can go ahead and split it up between your categories. Obviously some categories will get more than others (like gifts as opposed to postage stamps). But, you need to keep your bottom line in mind and try not to go over that amount. If you come up short, look for low-cost or no-cost ways to make up the difference without breaking the bank. Short on money for gifts? Why not hand make a few items for friends and family to get the most bang out of your buck. We’ll talk about stretching your holiday budget tomorrow!
Lastly, stick to it! This is most likely the hardest part of creating a holiday budget. It’s so easy to tell yourself It’s the holidays, I have to get it or This gift is so perfect for so-and-so, it doesn’t matter that it blows my budget and end up spending far more than you’ve allotted. Remind yourself why you made this budget and why it’s important to stick to it. Track everything you spend in each of the categories. Use a cash envelope system if you feel comfortable that way. Or, keep track of your expenditures on Mint.com or in your own personal system.
And have fun – that’s what the holidays are all about!
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