This post is part of our 21 Days to a Better Budget Series! To view all the posts in our series, please click here.
Is your budget ready for Christmas?
No?
That’s okay. Now’s the time to prepare for it if you haven’t already.
Go Debt-Free
It’s no secret on here that we’re fans of being debt-free and that this will be our 3rd Christmas, 100% debt-free.
What does that mean exactly? It means that we won’t be purchasing Christmas with a credit card (we don’t own any) and will be paying in cash for all Christmas presents, holiday food, gift wrap, décor, you name it. We’re paying all in cash.
Why should you go debt-free? It makes budgeting a whole-heck-of-a-lot-easier. I mean, you can’t grow cash on trees so you know how much money you have or don’t have to work with when you use cash only.
Decide What to Budget
Do you need a new Christmas tree? What about gift wrap? Are you hosting Christmas dinner this year or are you just expected to bring a dish? Are you traveling this year for the holidays or staying close to home?
These are important questions to ask yourself when setting up your Christmas budget because the last thing you want to do is completely forget about the fact that you have 40 guests that you need to feed, but you’ve spent all your money on Christmas décor. (Yes, this totally happened to me once – trust me you don’t want it to happen to you…)
Common things to include in your Christmas budget:
Holiday Travel (fuel, plane tickets, hotel costs, travel food costs, etc.)
Holiday Décor (Christmas wreaths, Christmas trees, ornaments, etc.)
Holiday Food
Holiday Baking (if you love to bake for holidays, especially as gifts for others, make sure you add this to your budget!)
Christmas Presents (make sure to include EVERYONE that you buy for – not just for the members of your household)
Wrapping Paper/Gift Bags/Boxes
Donations (Operation Shoe Box, Coat Drives, etc)
Traditions (make a list of your family’s traditions and determine any monetary cost associated with them)
Make a List
What gifts are you planning on buying? This is an important question to ask but too many times, we answer this question with a vague answer. We need to get specific.
You’re planning on buying your grandson some pajamas this year? Great! Now, put it on the list, along with the size you need. Planning on buying your husband that mac-daddy grill? Great! Now, figure out exactly which one you’re going to purchase, the exact current price of the grill and put it in your budget and watch the price to monitor if it drops to reduce price.
I do this every year for Christmas. I literally know exactly what items I’m purchasing and for who I’m purchasing them for. I actually keep an Amazon Wish List that I share with my husband with many of the items I plan to buy. I don’t buy all our gifts on Amazon, but having a list with prices makes it that much easier. 🙂
How Much Should You Spend?
I get this question a lot – not just about Christmas budgets but also about budgets in general. The problem with this question is that I can’t possibly answer it for you. It’s your money and you’re in control of how you spend it. If you decide to blow all your Christmas budget on décor that’s up you – it’s your money and you have to make it work for you. No one else can do that.
But, deciding how much to spend shouldn’t be difficult.
Look over how much you’ve spent in previous years and compare it with what you have planned to purchase this year. Figure out an average and high ball the number. That’s the easiest way that I have found to put a number to your budget categories for Christmas.
Make this the year that you avoid going over budget! Make a plan, stick to it, and avoid the usual financial hangover that happens in January.
What is your best tip for budgeting in Christmas?
This is so good, Jessi! So many people make Christmas a season of stress when it should be a season to celebrate the birth of Christ. I really don’t think He wants us to go into debt over that.
So true Lydia! 🙂
I LOVE how on top of it you are, Jessi! I haven’t thought about this yet, but that’s because I usually use “side hustle” money or bonus money for Christmas shopping in December. That said, I personally should create the list now and get things ready so that I’m prepared.
My husband thinks I’m crazy for having my list done in the summer but it saves my sanity once Christmas comes! 🙂
Planning early is probably most important for me. (So thanks for getting me thinking about it!) And really making a comprehensive list, too. It’s easy to focus on decor and gifts, but cards, wrapping paper, baking ingredients, etc., are easy to forget when putting together the budget.
I love Christmas, and I tend to prepare all year round – sometimes years out! So if your husband thinks you’re crazy, he’d think I’m certifiable! I really don’t understand people who will spend thousands on their kids’ Christmas presents. Last year I knew one woman who gave her kids a $5000 juke box as their ‘combined’ gift and then spent a few thousand dollars each on their other gifts. What the? Her husband is a farmer and she’s a cleaner so it’s not like they’re pulling the money in hand over fist. Another friend was worried because she’d “only” bought her (5 year old) son an iPad and a couple hundred dollars worth of toys, and she wasn’t sure it was enough. Of course two months later both friends were complaining about how cluttered their houses were! What’s really funny is that we go on nice vacations – all fully paid for, no debt incurred – and these friends always complain, you know, “I wish we could do that, but we could never afford it” – not realising that we spend less on a nice two-week vacation for the family than they spend on Christmas presents for just their kids.
I love spoiling my kids. Love love love it. They’re great kids, why wouldn’t I want them to have an absolutely amazing Christmas? But I refuse to go into debt. That doesn’t help them. They don’t want a mom and dad who are stressed and upset for months, just so they can have some material item that will, most likely, either end up broken in the trash or recycling or end up in the op shop when they outgrow it.
I love this! I’ve been planning on doing a budget friendly Christmas series myself and I love the points you have here! Ditto on Debt free Christmas! We’ve never gone into debt for my favorite time of the year! 🙂
Heck yes Rebecca! That is amazing that you’ve never gone into debt for Christmas before! Seriously – that’s an incredible feat! 🙂