Christmas is coming. That time of year is full of magic, light, and color. However, this festive season is both enchanted and expensive, so it is essential to know how to make an adequate Christmas budget.
Among gifts, decorations for the house, and preparing Christmas supper and lunch, there are many expenses involved. If there is no planning or good budget management, the month of December can be disastrous for your bank account.
There is a lot more to Christmas than just parties and gifts. One way for all of us to honor the genuine spirit of Christmas is to be better stewards of our finances and establish a Christmas budget.
It is essential to think about your Christmas budget a year in advance. In this article, you will find crucial tips to save this Christmas by creating and managing an account that suits your portfolio to enjoy family time and snacks of the season without suffering from financial anxiety.
Tips to Rock your Christmas Budget
Take Notice of Previous Year’s Spending
Before you think about this year, try to find out how much you spent last year. Search for all the invoices you find, along with bank movements, and put everything in a notebook or computer file. Include various types of expenses, from shopping, meals, stays, travel and gifts.
The ideal goal would be to aggregate all these expenses and set a limit for this year or compare the two years to spend.
Use method 50 30 20 to organize the budget
Draw up a list of all expenses to include in the Christmas budget. Take the value you defined and divide it into categories by setting a limit for each of these categories. The rule of 50 30 20 is drawn up given a straightforward premise: dividing the budget into three categories.
They will account for 50% of the budget. Expenses that guarantee a bare subsistence, such as rent, food, consumption bills, and transportation, should include in this category.
The budget for spending as consumer goods that do not fit as essential items and spending as leisure should include in this category and correspond to a maximum of 30% of the budget.
Savings and Payment of Debts:
With 80% of your earnings committed in the categories above, it is time to separate a portion of your income for purposes such as emergency reserve, pay off debts, and financial investments. This portion represents their savings and financial targets, being at least 20% of the budget.
Thus, if you find higher values in the first two categories, adjust your spending by making cuts and adjusting your standard of living to your earnings level.
In the third category, the reasoning is “the more the better.” For example, if you can save 50% of your income and live comfortably with percentages of 30 and 20 in the first two expense classes presented, great!
It means you will achieve your goals and financial freedom faster.
Thus, please keep the following logic in mind: the first two categories have maximum spending values, while the third represents what it saves in the month; the percentage is the minimum.
Make a list of the People You want to Buy Gifts for
Now that you’ve defined how much you can spend on gifts, distribute that amount to everyone who wants to offer you a gift. If possible, point out what you will contribute to each person and how much money you expect to spend on each one. Add it all up, and if the ultimate value exceeds the one you set for the Christmas gifts, start over.
You can choose how to be creative by expanding your budget or reducing how much you spend on each person and item.
- What gift cards have you received but have not spent them yet?
- Do you have any Amazon credits, Pampers points, or Plenty points?
- Try making handmade presents or decorations.
- Have you ever tried to make money doing research?
Use more account options, such as low-cost gifts, if you work in a profession such as sales you can offer them a discount or even gift cards, with a maximum set value that the person can use on a purchase you want.
Create a Fund Dedicated to Christmas
The best way to ensure that you live through Christmas without the risk of becoming indebted is to create a fund or specific savings for these expenses. During the year, you put money aside, in an account or a piggy bank, as you see it best. So when you get to the Christmas season, you’ve already had all your expenses insured. If you haven’t done so this Christmas, start preparing for next year’s fund now. It’s never too late to save.
Search Before You Buy
It helps a lot if you already know which stores you have to go to and what products you are looking for before you go to the mall. Also, searching in advance allows you to manage your Christmas budget better, as you have access to product prices.
Leave ATM and Credit cards at Home
Taking the money “counted” when you go shopping assures you you don’t spend more than you should. Since you have prepared your budget, you have already stipulated how much you will spend in each category and what you will give to each person, raise this amount at the ATM and leave Home with only that money in your wallet.
Write and Track Spending
The records must be continuous. Keeping all transactions posted is the best way to understand if you can respect the budget and make comparisons with previous years, for example.
Small extras of five or ten dollars may seem harmless, but if you repeat them several times, the total sum can wreak havoc on your budget.
Follow these tips to budget for Christmas shopping and live unforgettable moments without compromising your financial health.
Christmas Budget Templates
To help you have a quieter Christmas without extrapolating your budget, we have developed a specific Christmas budget planner template that is free and customizable.
It is tempting to exaggerate and shower everyone with gifts, but it is important to stick to your budget and enjoy the holidays with your loved ones without worrying about your finances. Instead, you can look for creative ways to give that won’t destroy you financially. Merry Christmas!