How to (Accurately) Budget for the Holiday Season

The holiday season is fast approaching. This should be an exciting time of year, filled with friends, family, and more than a few big turkey dinners. However, for many people, the holidays can be a time of stress and anxiety, as money concerns take center stage during this season of giving.

But this doesn’t have to be the case. Wise budgeting and spending can make all the difference during the holiday season, so it pays to start planning today to ensure you’re giving yourself the gift of financial security down the road. Here are some hints and tips that you can use to ensure a few weeks of festive fun won’t derail a year of diligent saving.

Budget Early

Most holiday parties and events may take place in December, but planning and preparing for these celebrations can occur much earlier in the year. You might, for instance, need to book a flight months in advance or stumble upon the perfect gifts while out shopping in September or October.  

Of course, this means you also need to start budgeting earlier. If possible, adjust your current spending habits—make coffee at home, cancel any unused subscription services—and set the extra funds aside for unexpected holiday expenses.

List Your Expenses

Create a complete list of your likely holiday expenses. Many people budget for gifts, but there are many other elements during this period that can strain your finances if you haven’t accounted for them. These include big things like travel expenses if you’re visiting family, Christmas parties and holiday foods, but also those smaller things that quickly add up like wrapping paper, holiday cards and postage, and new decorations. Once you have a list of everything you’ll need for the holiday celebration, you’ll have a much better handle on how much everything will cost you this year.

Set Spending Limits and Stick to Them

Compile a list of everyone you are purchasing a gift for and set your spending limit for each individual. A range is fine, say from $30 – $40 for each niece and nephew, but don’t exceed that $40 limit. If the gift you wanted to give that person is out of the price range, decide on another present rather than blowing your budget.

Consider giving the gift of time rather than a material gift. If your parents or other relatives are older, they may prefer the offer of a special dinner or some work around the house, as opposed to another sweater.

For those outside of family like close friends, consider baking them holiday cookies rather than buying a present. It’s a personal, inexpensive gift that spreads holiday cheer, and won’t break the bank.