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 Debt
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.