Preparing a Budget for Christmas

If you don’t already have one, you probably don’t realise that creating a budget for the festive season can be very beneficial.

When you have a Christmas budget, you are less likely to be stressed out after the holidays regarding extravagance, or paying off large bills. You won’t find yourself taking money from your other household budgets to pay for Christmas presents or other purchases. Your credit cards will not be maxed out and your funds will be secure.

It’s really not that difficult to do when you know the basics and apply these to your family. Following are some tried and tested steps you can take to prepare your budget.

Make your family’s Christmas budget by following these simple steps:

Step #1 – First establish exactly how many people you will be purchasing presents for. This is an absolute must to ensure your budget is effective.

Step #2 – How much have you allocated to spend on gift giving? (Did you have a Christmas account and add to it all year? If not, don’t panic – keep it in mind for next year. This will make your budgeting efforts easier next year, provided you are consistent in adding to it.)

Step #3 If you don’t already know, find out how much money you have in your savings and/or Christmas account if you have one. Write down all the household expenses counting bills, food, gasoline etc. Make sure that all family expenses are covered and not used for gift buying. Do not touch this money for gifts under any circumstances.

Now that you’ve established the money that’s not available, any money outside these household expenses can be used for gift giving. Try not to use credit cards for this purpose, as the ensuing bills will eventually need to be paid.

Step #5 – Consider making at least some of your presents this year. Especially for grandparents, aunts and uncles who love to receive current photos of the kids. Photo collages and other handcrafted items that the children make will be extremely popular and won’t cost much to make.

Step #6 – Once you know how much money is in the Christmas gift-giving pot, you can create a list of all the gift-related items that you need to purchase. These will be items such as:

Presents

Gift Packaging

Ribbons and Bows

Gift Tags

Step #7 – Allocate the amount you believe you will need to spend on all categories except presents. The amount left over is what you have available to spend on presents. (Keep in mind it’s better to spend more on the gifts than the wrappings! You can save loads by making your own wrappings and cards. )

Step #8 – Here’s a quick and easy way to work out what you can spend on each present – take the total amount of funds available in your budget for gifts and split it by how many people you need to buy presents for. An illustration would be if your budget for gifts is $200.00 and you have 8 people that you need to buy presents for, you would divide 200 by 8 and get $25 for each person. You may also come to a decision that there are children on your list that you would like to spend more money on, and adults that you can spend less money on. You may have 3 adults and 5 kids to buy gifts for and decide that you can find good gifts for $10 for the adults. You would then have $170 to split between 5 kids which would mean that you could spend $34 on each child.

Summary:

A Christmas budget can do a lot to help you to stay within your spending means. This will equate to a happier and less taxing time after the holiday season. Don’t forget to take into account that you will be spending more gasoline on buying trips, going to Christmas parties and family parties over the holiday season. If you don’t allow for it, it could upset your carefully planned budget.

If you plan to hold any holiday parties, make sure you allocate funds for the purchases you will need to make for these parties.

Budgets are designed to help you spend without stressing yourself out, so take advantage of these steps now so that this year the holidays will be all about spending time with family and friends and less about stressing out over money.