My last post focused on making a little extra money to help with the holiday budget. Today I would like to focus on the budget itself. A happy holiday season starts with a budget. When I was younger I would try to get something for every member of the family. Nowadays, that is just not possible. One sister has six children, the other sister has two, plus their spouses and my other siblings. That doesn't include my in-laws. The list is just too long and I know we cannot afford to purchase something for every.single.person. According to the American Research Group, the average amount spent on Christmas gifts was $861! I could feed my family for 3 months with that much money. To attempt to shrink that budget and minimize the risk of going over budget here is a list of tips to try out this holiday season.
- Set a realistic budget.
Determine what you can afford to spend. Financial planners suggest spending no more than 1.5% of your income on holiday purchases.
Carefully look over your finances, and determine how much you can afford to spend on holiday-related purchases. Don't forget big ticket items like travel or smaller expenses like wrapping paper. Set this figure as your overall holiday spending limit.
Let family traditions decide your spending. Can you remember what your sibling got you three years ago? Probably not, but you can remember making homemade ornaments or singing Christmas carols around the fireplace while decorating the tree. Family traditions are what we remember. Focus on that instead of the amount of money spent.
- Set a spending limit for each area of holiday spending. There are an endless supply of Holiday Spending Worksheets online, Organized Christmas seems to be my current favorite. Look through the list of holiday expenses and set a budget for each area of spending. For gift giving, to minimize costs I have been doing family gifts. Typically a homemade basket of some kind of food related goodies. One year it was homemade cocoa mix, this year I am doing homemade pancake mix with various syrups and pasta baskets with homemade croutons. (I will post about those later, stay tuned!) Luckily, the Dollar Spot in Target and the Dollar Tree help the budget for tape, wrapping paper, gift bags, etc.
- Track your spending throughout the season. Keep a running total of your purchases throughout the season. Depending on your ability to use rebates and catch sales, you will continuously tweak your budget to cover any overspending in certain categories. If you overspend in one of the categories, don't freak out, just scale your spending back in another category to make up for it.
I am attempting to keep our holiday budget at $250-300 for everything. It is definitely going to take some creativity and reusing items in new ways but I think I can do it! What are some ways that you survive the holiday spending craze?