It’s that time of year again. The holidays might be an exciting time, but it’s also stressful, especially for the wallet. We all want to save money during the holiday season, but it can be difficult when you’re feeling the pressure to buy fantastic gifts for everyone on your list. The good news is, there is a secret to creating a holiday gift budget that works. The bad news is, if you’re reading this in December, it’s probably too late.
The secret to creating a holiday gift budget that you can actually stick to is to create it at the beginning of the year. That being said, while it might be too late to budget the right way for this Christmas, January is around the corner, and so it’s the perfect opportunity to get into this habit for next year.
Why do you need to create a holiday budget 11 months ahead of time? Because Christmas is expensive! When you start thinking about the holidays, most likely in October or November, odds are you don’t have enough excess budget to cover the costs of gifts for everyone on your list. But if you put a little money aside each month from January until December, you should have more than enough to cover the costs and not have to rely on using your credit card for holiday shopping.
So, this coming January, get a head start and make your Christmas 2021 budget. Here are 5 tips to get you started:
- Create a list of everyone you want to buy gifts for. There are likely many people in your life who you will want to buy gifts for. Start by writing down a list of all of these people – family, friends, co-workers, teachers, etc. This will ensure you are well prepared in advance and that you can budget accordingly for the amount of gifts you will have to buy. While writing this list, also consider how much money you will need to allocate to each person – or who to scratch off from the list.
- Determine what you can afford to spend. Like any good budget, you will need to decide upon a realistic and conservative number that you can afford to spend. Begin by recording your monthly earnings along with all your monthly expenses. Once you’ve calculated the excess money you have left over, decide from there how much you want to allocate monthly to Christmas gifts. Divide your calculated figure amongst the people on your list to see your budget per person. This is a great way to understand what you can afford and will give you more incentive to stick with your budget and not go over.
- Adjust your budget if needed. Budgets are not supposed to be broken, but that doesn’t mean they can’t be adjusted. Based on external factors, you may find yourself with more or less money throughout the year. You may also need to add or remove people off your gift list. If this is the case, then it’s okay to reallocate your budget and adjust it appropriately. However, always keep in mind what you can afford and always adjust your budget accordingly when changes are made in your gift spending.
- Hold on to previous budgets to help you plan for this year. If you used a gift-buying budget last year, then bring it out this year. This is a great starting point for deciding how much money you will need this year and where you can tighten or need to loosen your spending. Keep track of your budget every year to become more efficient and accurate for the following year.
- Do your research before shopping. Lastly, but most importantly, you must stick to your budget. To do this, you will want to do research prior to shopping to make sure you’re getting the most competitive prices possible. Certain stores will have sales, and sometimes buying online is the more affordable option. You may also get bulk discounts at certain locations, and since you already have your list of people in mind, you can stock up and save big on gifts for everyone.
Sticking to a budget can be difficult during the holiday season, but there is nothing better than finding a great deal that leaves you with money in your pocket! By creating a gift-buying budget, you will have a happier holiday season and a great new year when it comes to your finances. For more information and resources about creating a budget for your life, contact our accredited credit counsellors.