Hey Taylor – I’ve been wasting a lot of time searching online for ways to save money around Christmas time, and everything I read seems impossible. Give it to me straight—is there a way to actually budget around the holidays, or am I doomed? – Charlie
Hey Charlie – There definitely isn’t a magical budget that lets you pack presents under the tree, travel to see family, and have all kinds of festive fun without spending money. That’s what people want, and it’s not a realistic option. That said, you can spend less at Christmas if you plan ahead and commit to your budget. It’s hard work, but it pays off come January.
–1. Dial back. For the most part, people talk about saving money as a hypothetical, then don’t take the steps needed to make it a reality. The Christmas budget that works is one where you think about costs you can actually cut back on. My first suggestion is to look at the fringe expenses that always add up, like dining out, overspending on groceries, and entertainment costs like going to the movies. These are all byproducts of the extra time away from work and school, as well as the ways we’re trained to have fun with friends and family. Can you watch a movie at home instead of spending $75 at the theater? Can you pack lunches before heading to the mall instead of dropping $50 on burgers and soda? If the answer is yes, that’s over $100 saved already.
–2. Bake, craft, create. When we budget our time wisely, it becomes much easier to budget our money. Expensive gifts are often the result of not having enough time to put together something more thoughtful and less costly. Suppose you set aside a few days or nights where you can work on homemade presents, which could easily cut your gift spending in half. If you’re not crafty, think of a video you could make or something you can do with the written word. In my experience, effort means as much as anything this time of year. Making something heartfelt will have a bigger impact than the Starbucks gift card you buy last minute.
–3. Stick to your budget as best you can, but be kind to yourself in the process. A budget is just a guide. It is not there to blame you or make you feel bad. If you set aside $50 for Christmas and end up spending way more, it simply means the plan needs adjusting or the season pulled you in a little deeper than you meant to go. Pick a number that actually fits your life and what you need to buy. Then try to stay close to it. And if you go a little over, it’s okay. Look at the rest of your month and see where you can save a few dollars to keep everything balanced. Even small tweaks help. The whole point is to stay in control and avoid the stress that comes from overspending. A little intention now can make January feel a lot lighter.
I wish I had a simple trick that made Christmas feel inexpensive. The truth is, you have to do the work. The good news is, if you set a sensible budget and try to stick to it, you’ll have success. Good luck and Merry Christmas!
Taylor Kovar, CFP®
CHIEF EXECUTIVE OFFICER
