TAYLOR J KOVAR
CHIEF EXECUTIVE OFFICER
CERTIFIED FINANCIAL PLANNER™
–Hey Taylor – I’m looking at my bank account and starting to think about how I can stretch my money through the end of the year. I know there’s no magical solution, but any tips on holiday budgeting would be greatly appreciated! – Garret
–Hey Garret – Now is the time to get your December budget in order, so you’re already off to a good start. It’s hard to find the money needed for all the gifts and events that come with the holiday season, but a little bit of planning can go a long way.
-1. Make your budget realistic. The first step in holiday budgeting is to establish a realistic total amount you can spend. Take into account the money you’ve got and what’s coming your way. Make a list of all the expenditures you can’t avoid, like groceries, mortgage, utilities, and gas, and then see what’s left over for holiday purchases. Some people might stop the budgeting there, but you’ve still got more to do! Once you know what you can spend, figure out what you actually want to spend it on—gifts, travel, food, entertainment, etc. For example, if you decide on a total budget of $600, you might allocate $300 for gifts, $100 for food, $100 for gas, and $100 for entertainment. This approach helps you track your spending and ensures you don’t overspend in one area at the expense of another.
-2. Get your priorities straight. When you know what you have to spend, you can start thinking about what you’re most inclined to spend it on. Come January 1, will you be thinking more about the gifts you gave or the places you went? Is traveling to see family the utmost priority, or do you have people coming to you so you need to really crush it in the gift-giving department? When you’re with your family around Christmas, do you do a bunch of home-cooked meals or does everyone end up dining out? The biggest downfall of a budget is wishful thinking; you need to be honest with yourself about how much you’re going to spend on certain things and do your best to set aside an adequate amount of money.
-3. Think creatively. Try not to panic after you budget and realize you’re about to spend $5,000 more than you have. Instead, think of ways you might be able to save here and there: fewer meals out, more homemade gifts, shopping strategically to buy things when they’re on sale. By starting the planning process now, you have time to get clever with how and where you spend your money. If you wait until the last minute, overspending is all but guaranteed.
Budgeting for the holidays feels overwhelming, but that’s usually because we let it sneak up on us. Set aside an upcoming evening to outline a good spending plan and you can win the season. Good luck!
