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Budgeting for The Holidays to Prevent Debt

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If you never do any budgeting for the holidays, you may be setting yourself up for debt and financial stress.

The holiday season is one of the most stressful times of the year due to the financial pressures.  Between the gift giving, holiday entertaining, and the regular monthly expenses, it all adds up to an expensive time of year!

When you start budgeting for the holidays early, you’ll have a handle on your holiday spending throughout the season.

Benefits of a Budgeting  for the Holidays

Keeping a budget during the holiday season will benefit you in many ways. First, you’ll avoid overspending, which will keep you from playing “catch up” when the season ends.

Second, you’ll reduce financial stress throughout the holiday season, which will make the experience more enjoyable for you.

A couple of simple budgeting practices during the next few months will have a positive impact on your holiday spending, which can help to prevent you from going overboard or becoming overwhelmed.

Holiday Budget Strategies to Avoid Debtbudgeting for the holidays

1. Create a budget. Determine how much money is available for you to spend based on your current financial situation. Be realistic with your holiday spending budget, regardless of how much or little you can play with. This is your spending limit, and your goal is to stay within it.

Remember that your expenses must be less than your income. There’s no need to get into extensive debt because of the holidays.

2. Make a list.  Make a list of all your expected holiday expenses so you can create a realistic plan. Keep everything in mind, including holiday travel expenses, shopping, and anything else you plan to spend money on.

3. Create a budget worksheet. Create a basic budget worksheet on paper or on your computer. Create a column to brainstorm ideas, a column for your planned budget and a column for how much you actually spent on each item. Track overall budget and actual spending as well to see how you do at the end.

4. Tweak as necessary. Make changes to your budget whenever you overspend on any item so you stay within your budget overall.

Try to set realistic budget amounts for every item on your worksheet in order to minimize the need for edits to your worksheet, but do not be afraid to make edits as necessary.

5. Trim as necessary. Giving gifts to your neighbors, your children’s teachers, and service providers like the mailman is a nice sentiment, but not necessary. Be realistic about what you can afford and what is necessary then…, trim the list!

6. Start early. When budgeting for the holidays, starting early offers a definite advantage.  Avoid leaving everything until the last moment; otherwise you’ll likely pay higher prices and spend more time feeling aggravated in the lineups.

Get a Handle on Your Holiday Spending & Remain Debt-Free

It only takes a few simple changes in your spending and budgeting habits to improve your holiday spending experience.

By starting early and following a plan, you can overcome the obstacles of debt and financial stress that too often comes with the holidays.

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4 Comments

  1. Sound advice! Along with the list know what you will buy the people on your list in case things you targeted go on sale!

    1. Darlene Berkel says:

      Thanks for the comment Haralee. Making a list of expected holiday expenses is crucial for avoiding overspending. The more detailed the list, the better the chances you will stick to it. A list with an item “shopping” is not as good as an itemized list with a maximum amount for all the things you need to shop for during the holidays! And the Black Friday & Cyber Monday sales are always a good way to stretch your budget even farther! But first, the key is to have a sound, realistic budget for holiday spending. It’s a MUST to avoid holiday debt and the stress that comes along with it.

  2. I’ve never understood people who go into debt over the holiday period – why add that type of stress to your life? When we were younger we bought our kids’ toys at the mid year sales, we kept things simple and never tried to keep up with the Joneses. Our life now is debt free and so relaxed. My motto – always spend less than you earn!

    1. Darlene Berkel says:

      Leanne, it’s amazing how many people go into debt over the holiday and add extreme stress to their life. It’s a snare. They key is indeed to keep things simple, plan a budget, stick to the budget, and stay away from credit cards. There is nothing “happy” about starting the new year deep in debt, financially stressed and unable to pay the bills come end January. Your motto bears repeating – ALWAYS spend less than you earn!

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