How to Stick to Your Holiday Budget in 6 Easy StepsBy Caitlin in Money
Even with the best intentions most people can’t quite seem to stick to their holiday budgets, overspending has almost become a holiday tradition. The average Canadian will plan on spending less a $1000 this year but will end up paying several hundred dollars more than that. With family members, friends, co-workers and even pets to buy gifts for it’s no wonder sticking to a budget can seem almost impossible during this time of the year. Add on top of all the gifts that need to be purchased, dinners out to celebrate, new festive clothing and taxis home at the end of the night.
The holidays are expensive, even for those on a budget and starting a new year in debt and stretched thin is a nightmare you’ll probably want to avoid as much as possible. This is why we’ve compiled our top 6 tips for sticking to your budget this holiday season so you won’t have to survive on ramen noodle dinners in the new year.
1. Create the Budget
First and foremost you need to actually create a budget if you want any chance at sticking to it. You need a concrete budget, one that is written down on paper or typed out on your computer. Having a rough idea of the amount of money you’d like to spend this year isn’t a budget. You should put aside some time and sit down and think about your budget very carefully (include your significant other if you plan on sharing the gift purchasing this year). Here are some things you include in your budget:
- Write a list of all the people you want to give a gift to this year. Include everything, even all those little gifts that probably won’t cost you that much, they tend to add up. This could be small hostess gifts you’ll take to dinner parties and the Secret Santa gift for your office party.
- Once you know all the people you want to buy gifts for write down some ideas beside each of their names. You should also include the amount you plan on spending for each person or event.
- Don’t forget about food. If you’re making the family Christmas dinner this year or are invited to several parties where you need to bring something, you need to include this in your budget. Most people don’t bother to include food in their budget because it’s not technically a gift, but the food could be the one thing that pushes your over your limit.
- Once you’ve done all this and know exactly what all your expenses will be you need to add it all up and compare it to what you can actually afford. You’ll probably need to cut a few things from your original list.
2. Think About Being Creative
Now that you’ve made your budget but find that you can’t afford to buy all the gifts and food you planned on buying, it’s time for you to get creative. Every family is different and every group of friends is different so you’ll need to make your own choices for this step. But generally speaking we’re talking about gifts that don’t costs as much as more traditional items. Time is a great gift for family members you don’t get to see as often as you’d like.
If you’re in fact crafty and like to made gifts then making creative gifts is a great way for you to save some money this years. Obviously this probably isn’t everyone’s cup of tea but if it is here are a few great options.
- Cookies or favourite holiday backed goods
- Homemade candles
- Homemade bath products
- A family photo
- A knitted scarf or sweater (if you’re really crafty)
If being creative sounds like a nightmare to you then you should try suggesting that your group of friends or your family do their own version of a Secret Santa. Everyone can choose a name and that way you’ll only have a buy a gift for one person instead of everyone.
3. Catalogue What you Already Have on Hand
When we say catalogue what you already have on hand we do kind of mean re-gifting, but of course that’s not exactly something that everyone wants to do or thinks in appropriate so we’ll let you make that decision on your own.
What we really want to encourage you to do is take a look around your house for items that could potentially reduce the amount of money you need to spend this holiday season. Ignore all the used items and look your stash of candles, bath products and whatever else you purchased in bulk during the sales this year. “Re-gifting” (so to speak) the 20 scented candles that you are currently hording in your closet probably isn’t going to offend anyone and they’ll be great options for co-workers or other people who you had planned on getting small gifts for. If you’re really determined to stick to a strict budget this year and know you’re going to have trouble doing so, think about those unused gift cards from last Christmas. Yes, this is technically re-gifting but if you’re ok with it so are we. Finally, use your credit card reward points. There are usually options to purchase gift cards and smaller items, this way you’ll be able to get a few gifts without spending your actual cash on hand.
Whatever you chose to use from around your home just remember that these are gifts for the people who love you, you don’t have to go overboard for them to appreciate what you give them.
4. Start Early and Start Now
If you haven’t already started shopping early to beat the rush then you need to start right now, especially if you plan on sticking to your budget. Shopping the final weekend for before Christmas or even the day before you need to give a gift will make it impossible to stick to your budget. You’ll likely be desperate and stressed out and purchase the first thing you see without even thinking about the price. If you start at least a bit early then you’ll be able to wait for sales and find the items you want at the prices you want.
Planning to start early will not only allow to you take your time, get great deals and avoid the stress of holiday shopping, it’ll give you time to plan alternative or homemade gifts if you can’t find the perfect one in stores.
5. Keep Track of Your Money as You Spend it
Your first step was to create a budget but the most important step is for you to actually use the budget. In the hustle and bustle of holiday shopping your spending can easily start to add up before you even realize it. This is why it’s important that you keep track of all your spending in real time.
We suggest that you get yourself some kind of app for your phone that allows you to track your spending while you’re shopping. Your phone is probably always with you so it’ll be easy to take a moment and enter in a purchase you’ve made and continue on. There are lots of different budgeting and shopping apps but if you want to keep it festive here are a few holiday themed ones:
- Christmas Budget Planner
- The Christmas List
- Christmas Gift List
6. Find the Perfect Gift and Then Stop Shopping
This is probably one of the hardest things for most people to do because we always have that feeling (especially during holiday shopping) that there’s something better out there. Once you’ve purchased a gift for someone cross their name off your list right away and then move on to the next person. Don’t dwell on gifts you’ve already purchased, this will only lead to more stress and more money spent. You will be tempted to take a quick look in one more store or spend a few minutes on your lunch break shopping online, don’t. You’ll only drive yourself crazy and rack up a credit card bill that will make you cry in the new year.
Sticking to a budget during the holiday shopping season is definitely one of those things that no one looks forward too. If you’re having a hard time and know you’ll probably overspend this year just think about your credit card bill and follow our 6 steps.