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Have you come up with your holiday budget yet? Well according to the National Retail Federation, most U.S. consumers estimate that they will spend an average of $967 during this year’s holiday. Sounds about right?
Although the holiday season is one of giving and a season of spending, if you don’t have a proper plan it’s very easy to overspend and zap your spirit during this season.
However, if you want to take the stress out of this season you need to create a budget plan and ensure that you stick to it. Making a plan will not only reduce your stress but will also prevent you from overspending and potentially racking up dept this season.
Creating a Holiday Budget
Creating your holiday budget is more or less the same as drafting your regular budget. It just takes a little thought and you are done.
When it comes to creating a holiday budget you need to resist the urge to draft a budget plan at the last minute. You, therefore, need to budget for the holiday well in advance. Scrambling for holiday cash a few days to the day could end up wrecking your finances. A little planning early goes a long away toward ensuring that you succeed.
Begin with the last holiday expenses
You need to start by listing all of your expected holiday expenses. This includes cards, gifts, wrapping paper, gift exchanges at work, traveling expenses and other charitable donations. This will give you an idea of things that you need to pay for apart from the gifts. Although many people only think about the gifts and ask themselves why money is so tight during the holidays, they forget about some of these things.
Set your spending limit
You also need to know how much you can afford to spend over holidays. By having a set number in mind, you can help keep your holiday from turning into a free for all. For instance, if you are drawing from holiday savings accounts you need to budget based on the amount of money that you’ve saved. You could also budget for the holiday using your monthly cash flow. To do this, it’s important to review your budget and see how much you’ve been left with once you’ve paid your bills. This means you may need to cut back on some things to make room for your holiday purchase.
Budget for individual categories
Once you know the total amount of money that you need to spend, you should break that down for each holiday category. The reason why you need to do this is to try and be as detailed and specific as possible so there are no forgotten expenses that you may need to account for later on. If you are worried about not having enough money then you need to build a small cushion into your budget for any unexpected emergency.
Make a shopping list
Create a list for your shopping. While doing this you need to have one tow idea within your price range for each individual. If you take your time and plan ahead for major sales you may be able to find some great goods and gifts for less than the amount of money that you’ve budgeted for.
Prioritize and compromise
If it’s the first time that you are noting yours pending then getting your holiday budget down on paper can be a bit tricky. After you’ve come up with the budget you need to review each category and ask yourself the most important things for your holiday. Putting the amount of money that you are spending into perspective can help you tighten your budget so that every dollar spent has a purpose.
How to stick to your budget
While making a holiday budget is a bit easy the difficult part comes when you have it stick to it. Thankfully, here are some of the things that can help you stay on course
Research everything before you buy
Before you buy anything it’s important to carry out thorough research. It’s good to do some comparison while shopping goes on your shopping list. Since sales abound during November and December, doing some little research will help you save a lot of cash. If you fill that the process involves a lot of work, don’t worry there are several apps out there that can assist you.
Keep track of your spending
One of the easiest ways to stick to your holiday budget is to ensure that you keep track of the amount that you spend. If you’ve drafted your budget you need to write down all the purchases as you make them so as to see how much money is left within each category. If you want to be sure you can always subtract the cost of the gifts and even other costs as you go. This will give you a rough idea of whether you are following your budget or not. If you are not following your budget you can always make some adjustments.
Use cash only system
While doing the actual shopping make sure you bring your cash along. This means that once you run out of the one you are done for the day. You can also put money for each person in different envelopes and carry that with you. This will ensure that you have your budget planned out in a way that you can manage. According to financial experts, this can help you budget better.
Set expectations with your family members especially the children
If you are expecting to buy a few gifts then you need to tell your family members in advance so that they do not have huge expectations. This is also the time that you need to discuss economically feasible and reasonable gift giving tactics with friends and family members such as name exchanges, grab bags or even skipping the gifts altogether.
Don’t use credit cards
Using your credit card to shop during the holiday season can create a very big hole. According to budget experts, it’s quite easy to spend more than you’ve budgeted for if you are using a credit card. Basically, if you feel that you don’t have any cash don’t spend it. While credit cards are an easy way to think that you have spending power you may end up paying a lot of money in debts later on.
Look for free shipping and use coupons
Apart from comparing the prices, another way of saving money is to check out for promo codes, coupons, and free shipping deals while shopping online. If you fail to find free shipping then you should check to see the ship to store can help you save some money.
It will be a bit difficult to stay on budget if you are not realistic about your budget. You, therefore, need to ensure that the dollar set that you’ve set is not too strict. You should also ensure that you don’t have a lot of room to overspend. If you think that you may dip into your savings, or you’ll have a difficult time paying off your credit card then you need to think twice.
Use Printables For tracking
I love technology, but sometimes simple pen and paper really helps to put things in perspective easily. Using a printed budget sheet can easily ensure you are getting what you need and not. Use our free holiday budget printables for the whole season and see if that helps you stay within your budget.
Download your copy of the Printable Holiday Budget Here.
There you have it. How to create your holiday budget and stick to it. By taking these tips into consideration, you will not only be ready for the holiday season but you’ll also prevent yourself from a lot of stress after the holiday season. Good luck.