The holiday season is filled with so many opportunities to spend time with people, eat yummy foods, enjoy decorations and other warm and fuzzy things. Unfortunately, it’s also a time to accrue a ton of debt and get super stressed out. The stress doesn’t have to be a part of your package. With a little planning, this season can be full of big fun.
The idea of budgets make non-budget people cringe. As a former non-budget person, I TOTALLY get that. But after living through the Christmases filled with the regret of overspending, setting a budget has made a world of difference. Once the holidays are over, I’m left with memories, not debt. Follow these steps to create a working budget for your family. Make it as detailed as you feel you need. Too few line items will make it worthless, too many line items will stress you out.
Step 1: Categorize
Make a list of folks you want to give gifts to. Then, make a list of the other things you want to do this season – holiday cards, decorations, food (for parties/gifts), gas & eating out (when you’re shopping or traveling), postage & shipping (do you have people out of town you’re shipping gifts to?), charitable giving, etc. The categories will differ for you – these are just to help you get started. Use this free printable budget to gather your info.
Step 2: Calculate
Decide how much you can spare from each paycheck between now and Christmas. Be realistic. Christmas doesn’t have to cost you a fortune. If there’s little or no extra money for your budget, brainstorm ways to make a little extra cash — sell some of your things, offer to babysit for someone, or clean for someone. Consider a low cost or no cost Christmas. Roll spare change. Upcycle thrift store finds. Pinterest and Google are your best friends for low budget gift ideas.
Step 3: Assign dollar amounts.
After finding your magic number in Step 2, look back at your list from Step 1. Now comes the tough part…..figuring out where the money should go. Look back over your gifts list. Define your spending limit for each person. For instance, Cousin Krissy who you see once a year doesn’t get the same dollar amount as your kids who are 4,6,8, & 10. Don’t feel guilty about spending limits. Super sentimental, thoughtful gifts can be bought/made for very little money. Grandmothers LOVE pictures of the grandkids. There are lots of portrait places that offer GREAT pictures and packages for $20-$25. Pair with a few inexpensive frames and you have gifts for several family members. Next, assign dollar amounts to the remaining items on your list. Are holiday cards important enough to fit into the budget? Is hosting a party more important than buying matching seasonal outfits? Prioritize.
Step 4:Check the numbers.
Do your assigned dollar amounts equal your available funds? If so, great! You’re on the right track. If not, don’t despair. Remember your goal – a debt free holiday. Look back at the numbers and list items. Are there people on your list who could be removed – even if just for this year? Don’t look at this process as sad or stressful. Look at it for what it is – making reasonable, thoughtful decisions based on available resources. It doesn’t mean all Christmases from here on out are ruined. It is one step in the right direction of making good choices for your family.
Step 5: Stick to the budget!
A budget is no good unless it’s followed. Use this printable budget to keep a running tally of funds spent. Going over budget on an item means you’ll need to cut somewhere else.
Step 6: Get the whole family involved.
Challenges are so much easier when they’re shared. If the budget isn’t super tight, no conversations may be necessary. However, if you’ve lived years overspending and a precedent has been set, there may be a few people you owe an explanation. Let them in on the plan.
Step 7: Start planning for next year.
The hard part’s done. After the holidays are over, you’ll see how much you can spare from each paycheck. Apply that number to next year’s paychecks and when the holidays roll around, you have a much bigger number to work with. At the very least, you have a working gift list and can start your planning early – you can become one of those people who get their shopping done by July……even though we HATE those people! 🙂 Not really – that’s just the jealousy talking!
The biggest piece of advice here is DO NOT FEEL GUILTY. Our family loves the Little House on the Prairie (affiliate) series of books and their Christmas stories are so sweet. They made gifts for one another and shared the day with loved ones. It was a special time because they MADE it special, not because any big ticket items were involved. Need some independent confirmation? Watch this.
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Looking for more tips and tricks? We love these resources:
- Christmas on a Zero Budget
- Simplifying Gift Giving
- Low Budget Gift Ideas
- Free Yourself From Guilt
- Ways to Make Quick Money