Budgeting Through the Holidays

It may only be October, but the holidays are right around the corner. I wanted to take a minute before we entered the November-December craziness to touch base and talk to you about surviving the holidays without breaking the bank.

Setting a holiday budget is never easy. It feels like, for most people, the ideal number they’d like to spend inevitably gets blown out of the water by oddball expenses. Maybe they go overboard with gifts during Black Friday, or they forgot that Aunt Mary and Uncle Dan were coming into town and had to rush out to buy an extra set of clean sheets and bath towels to accommodate a full house of guests for Thanksgiving.

Sometimes it’s even as small as you and your spouse keep grabbing coffee and breakfast from Starbucks on your way to work because you feel too busy and too tired to make a pot of coffee and oatmeal at home. Whatever your “guilty” holiday expenses are – they add up, big and small. That’s why thinking about them in advance and coming up with a game plan can help.

Get Clear On What You Have to Spend

When you look at your budget, be honest with yourself about what you actually have to spend during the holidays this year. Don’t count on “extra” funds that might come in to cover these expenses, like an end-of-year bonus, either. While these windfalls are helpful, they shouldn’t be part of your holiday expenses budget. Once you have a number in mind, you can look at what expenses reasonably fit into that figure.

Don’t Forget to Include Non-Gift Expenses

It’s easy to budget for gifts, even if you feel you often overspend when doing the actual purchasing. However, remembering to account for all of the non-gift expenses that come up around the holidays can be a challenge. Here are a few to watch out for:

  • A donation from each employee to buy your boss a holiday gift
  • Travel expenses (even gas) getting to and from the homes of family and friends
  • Expensive meals (and drinks) out with coworkers, family, or friends who want to see one another during this time of year
  • “Extra” charitable giving that you hadn’t budgeted for
  • The evergreen door wreath that the next door neighbor kids are selling for a holiday school fundraiser
  • Meals out with family when you’re too busy to cook or pre-make freezer meals to save money
  • A new outfit for your kids to get dressed up for their school’s winter or holiday program

These are just a few ideas to get you rolling. Make a list of things that have cropped up in the past, and any that you’re anticipating this year. Remember to include these in your budget.

Avoid Budget-Busters 

Don’t be afraid to think outside of the box when it comes to your holiday expenses. If you look back at what expenses have “busted” your budget historically, you should be able to come up with creative ways to sidestep those expenses, or trim them down significantly. For example, if you find that every year you end up overspending during Black Friday shopping, think of what you can do differently this year to avoid that mistake. You might choose to opt out altogether, or maybe you decide to make a strict shopping list for different holiday gifts that you know you’ll be able to find on sale after looking through the newspaper ads.

Alternatively, maybe you find that hosting Thanksgiving at your house every year is getting to be a little bit hard on your wallet. Feeding all of your extended family the holiday favorites can be expensive, and that’s not even taking “extra” expenses that always seem to crop up when you have guests into account. Maybe this year you reach out to everyone individually and offer to coordinate a pot luck that takes some of the cooking (and spending) pressure off of your shoulders and still manages to prioritize the family tradition.

Plan In Advance 

If you can, start putting a bit of money aside for the holidays as soon as possible. October is a good time to start, but realistically you should have incorporated holiday savings into your annual budget and been saving a small amount each month. The more you can plan ahead, the less surprised by big “unexpected” holiday expenses each year.

Remember – Gifts Aren’t a Reason to Blow Your Budget 

The truth is that holiday expenses are expected. They happen every year. Yet, we’re still surprised by them every year like clockwork. Even if you haven’t planned in advance for holiday expenses this year, it’s not too late to get a jump start on next year. Don’t be afraid to reign in holiday spending, even if it bucks family tradition, and then work on saving in advance next year. You can even have candid conversations with family members about your holiday spending goals this year to keep everyone’s expectations in check. Remember, even though the holiday spirit can be overwhelming, it’s not a reason to blow your budget. Keeping your financial goals in mind, and staying on-course can be a huge help both now and in the future.

Want to learn more about budgeting? Check out our 10-20-30-40 Budgeting Guide to get a jump on next year!

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