Most of us don’t start thinking about the holidays until the Christmas decorations start showing up in stores and holiday advertisements dominate television. With all of the expenses, there’s a reason so many people say the holidays are the most stressful time of the year. But why stress out when it should be a time for fun and for visiting family? There’s something to be said for planning for the holidays in advance. One of the most important aspects to planning your holiday is budgeting, and knowing that you have enough funds to enjoy the holidays will lift one of the most significant sources of stress from your shoulders.
The holidays are often associated with high spending. Here are a few major areas that are a drain on the budget:
- Gifts: Most holidays involve some form of gift-giving. It’s up to the individual how much to spend, but no matter how much or little, you can count on a portion of your holiday budget being delegated to gifts.
- Parties: When you think about the expense of throwing a party, you’ll realize that after breaking it down, the cost can really add up! The price may increase if you’re hosting, but even if you’re just a guest, the responsible thing to do is to bring food or drink to help out the host. Hosts will have to provide the refreshments, and you may spend money decorating as well. Renting out a space? That will also add to your overall expense.
- Travel: Holidays are a time for family, but not all families live close together. You may have to count on buying a plane ticket, bus ticket, or gas money to celebrate the holidays with family this year.
- Charitable Giving: The holidays also put many people in a charitable mood. But whether you are purchasing gifts for a toy drive, helping out a food drive, or choosing your favorite charity for a cash donation, make sure there is room in your budget to give.
Start Your Holiday Savings Fund Now
When you start thinking about how much the holidays may cost this year, it can feel daunting. But if you start budgeting now, you’ll find yourself in much less of a pinch. Here’s how to get started:
- Create your holiday spending budget. Decide how much you are able to spend and how much you predict that you’ll need. You might find that what you have and what you need are two different things, and you’ll have to find a happy medium or go with what’s practical and possible.
- Once you’ve created a budget, assign an amount to each category of holiday expense.
- Start saving on a monthly basis. Decide how much you can afford to save each month and you’ll be able to add up what you’ve saved by Christmas.
- If you’re concerned with overspending, you can set a few ground rules: only use cash, don’t dip into emergency funds, etc.
- Track your spending. An organized budget sheet can help you stay on task.
- Got a small gift budget? There are so many DIY gift ideas out there that your loved ones will appreciate.
- Use a holiday budget calculator if you need help creating your plan.
- If you find that you can’t afford to keep every person on your gift list, bake a holiday cookie platter for those who are leftover.
- Start collecting coupons! They may end up leaving you with a little extra in your gift budget.
- Adopt better spending habits. This makes it much easier to save up for the holidays.
- Remember that gifts don’t have to be expensive to be good. Prioritize thoughtfulness over the price tag!
Having a holiday fund to cover the expenses of the season can be beneficial in managing your money. But when unforeseen expenses arise, these may be among the first funds to be drained. Should those funds be drained and it’s not enough to cover the expense, alternative lending options may be a good option to make ends meet.