Because You Need to Plan How You Purchase All Those Gifts
The holidays are a time of joy for everyone – except for perhaps your wallet and budget, as they can really take a beating. How can you manage your budget so you aren’t still paying for the holidays well into the new year? Here are my top four tips for preparing your budget for your holiday shopping.
1) Plan Ahead – Far Ahead
My wife is one of those annoying people that buys gifts well in advance of November and December. It’s one big way try to prepare for the holiday season. Spreading out the gift giving is the Number One way to prevent a big hit to your wallet.
But since we are not all planners, how can those of us who almost enjoy the agony of buying everything during the rush of the holidays prepare? Start putting money aside now! There are many ways to do this:
- Take $20 cash back every time you go to the grocery store and put it in a Christmas envelope that you do not touch under any circumstances;
- Move a certain amount (say, the recommended $20 from the above tip) from every paycheck into a special savings account all year long to only use for holiday shopping needs;
- Work some occasional paid overtime or look for a freelance side job and designate that money as the Christmas fund.
2) Set Gift Limits and Stick to Them – No Matter What
As in, DO NOT spend more than what you set aside. Just don’t do it. My wife and I always give ourselves a spending limit for the gifts we give each other, and we both abide by them without splurging.
We simply feel it requires far more thoughtfulness to purchase gifts within specific budget constraints than to buy something grandiose each year (though if you are reading this, honey, I wouldn’t say “No” to a new car!). And while it’s tempting to buy “one more thing” or to just blow the savings for something over-the-top, just don’t do it.
3) Make Your Own Gifts
This tip isn’t for everyone, but I have written before about the benefits and practicality of DIY gift-giving, and this can be a great way to give fantastically thoughtful gifts without spending all your cash. However, this requires a lot of pre-planning (See Tip #1!), as homemade gifts can spiral your money and time budgets out of control if you are not careful about what you are making. Just ask my wife about my grand woodworking plans!
4) Keep Track of Everything
Last but not least, you should record everything you buy and spend. Everything!
For example, when preparing for our son’s first Christmas, we were guilty of buying entirely too much (which is a common occurrence with new parents), and we didn’t even realize it until everything was all set out and ready to be wrapped. A little toy here and there added up to complete excess – and our budget suffered accordingly for several months.
Now, we keep a list of what we have bought for everyone and we stop at an agreed-upon point (See Tip #2). This is an easy way to keep your budget under control as you can see where your money is going and know how much is left.
And if you find that you’ve bought everything you needed under budget, resist the urge to spend more! Set that money aside for other things (like paying off debt or a special gift another time of year), or you could purchase gifts for charities like the Angel Tree or Toys for Tots!
Here’s to a happy and healthy holiday season – for your family and your budget!