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How to Maintain a Budget during the Holidays

Tips on getting through this holiday season financially

How to Maintain a Budget during the Holidays

The obvious first step to maintaining a budget during the holidays is to Have One. The strategy that can save the most money is to decide right after this holiday season what you can afford to spend next year, and what or who you will be spending it on. Divide the number by 12. This is how much you need to put aside each month in order to cover the next year’s holiday expenses. Then you can look for specials all year long. However, it’s not too late to make and stick to a budget NOW.


The most important thing to keep in mind is that you don’t want to go into debt over of holiday purchases. If you can’t pay off your credit cards at the end of the month, vow to only use cash. Otherwise, your “steals and deals” will end up costing you more in compounded interest. Try to follow these guidelines:


Create a Budget

  • Holiday Expenses often include more than gifts. Start by making a list of all your holiday purchases. Include gifts for family, friends and gift exchanges; cards, wrapping paper and postage for gifts you have to mail; invitations, food, decorations and paper goods for entertaining; travel expenses for celebrating with out-of-town relatives; and charitable donations, like Sub for Santa or your local Food Bank. Remembering the incidentals will keep money from being so tight in December.


  • Your spending limit should only include money you have set aside, extra money you can find by cutting expenses elsewhere in your monthly budget, or by lowering the amount you spent on gifts and incidentals last year. Have a total amount in mind, make a list of all the people you expect to give gifts to and assign an amount to each one. In our family of 5 married children and 14 grandchildren, we designate a certain amount for each of the parents (our children and spouses) and cut that amount in half for each of their children (our grandchildren). For a family that size, going over-budget even a little on each person can rapidly raise the amount budgeted for gifts. Add to gifts the amount you expect to spend on incidentals, and make sure the total amount doesn’t exceed what you can afford to spend.


Tips for Staying within Your Budget

  • Create a list for your holiday shopping. You should have one or two ideas within your price range for each individual or category of incidentals. Sometimes teens would rather have a gift card or cash so they can pick out what they want by shopping for themselves. Giving that type of a gift is actually an excellent way to make sure you aren’t tempted to buy a more expensive gift than you’ve budged for.


  • Start shopping early so you can take advantage of sales all year long or at least the major sales of the season, like Labor Day, Black Friday or Cyber Monday. Online sales announced in emails you receive throughout the year are also a good source of bargains, when you know what you want to buy and who you are buying it for. Look for Free Shipping offers. By planning and shopping ahead, you might be able to find some great gifts that are under-budget. If you aren’t tempted to buy more because of what you saved, what’s left over can help to pay for unexpected holiday expenses.


  • Earn extra money to cover your holiday expenses by taking on a holiday job. This may be a good short-term solution if you forgot to budget for the holidays during the year. Ask others where to find the best deals. Cut back on expensive extras like pictures with Santa.


  • Be creative. Make your own gifts, wrapping paper and decorations. Homemade gifts can often be more meaningful than more expensive ones. There are lots of good ideas on Internet sites like Pinterest. Homemade cards that include a personal message are the best!


  • Advocate for lower spending limits set by a large family, or even suggest not giving to relatives who are not in your immediate family, like aunts, uncles or cousins. Another way to save on Christmas gifts for a group is to do a Secret Santa gift or to draw names. That way, you will only have to shop for one person. Besides saving money on gifts, it allows people to purchase a nicer gift for one person, rather than several less meaningful gifts. This could be applied to office giving as well as extended family.


  • Keep track of all your purchases. Bring your gift list and your budget sheet with you on every shopping trip. Keep track of the cost of holiday-related outings and parties so you can more accurately budget next year. As you purchase gifts or buy other holiday-related items, subtract the amount from your running Christmas budget total. If you do shop early, be sure to write down what you purchased for whom and what you still need to buy.


Budget-Friendly Ways to Make the Holidays More Memorable

  • Make traditions that you continue to do every year. Do things with family that don’t cost much, like baking with grandchildren, creating homemade ornaments or gifts, taking a drive to see Christmas lights, going to a free community concert, having a family talent show, reading a special story or watching a favorite holiday movie. Share the cost of get-togethers by making the food potluck. Traditions that involve time spent with others can be more memorable than gifts.


  • Give gifts to someone who is really in need. It’s a great way to get into the holiday spirit and can be an alternate option to buying for everyone in your family. You have an opportunity to talk to your children and grandchildren about the importance of service and giving. If you don’t go overboard, you could save money, while doing good as a family at the same time. Be sure to include charitable gifts and contributions in your budget.


Your friends at Citywide Home Loans feel strongly that monitoring spending and sticking to a budget is something everyone should make an effort to do this and every holiday season. According to recent data, 24 percent of millennial shoppers still haven’t paid off their holiday credit card debt from last year. Staying out of debt is something that can make your whole year less stressful and help you to save for larger purchases, like a bigger home or that bathroom remodel you really need.


Best wishes for the happiest of holidays and the best New Year ever!