Christmas on a Budget

Christmas gift-giving memorializes the gift God gave to the world 2000 years ago.

But between the smell of pine boughs, the Christmas music in the background, the lights dazzling your eyes, the sales calling your name, and other shoppers reaching for the item you want, it’s easy to get caught up in the Christmas spirit and lose control.

More people than ever are expected to pay for Christmas with cash or debit cards this year. Yay America! There’s no reason for your January credit card bills to cause a heart attack. Here’s a news flash: Christmas comes at the same time every year!

Use these steps to keep your Christmas spending under control.

1. List everyone you want to buy for. Family members? Extended family? In-laws? Friends? Co-workers? Neighbors? Teachers?
2. Determine how much you have to spend. If you’ve been budgeting for awhile, you’ve probably been saving all year for Christmas. (Even just $50 a month gives you $600 come December.) If not, assess your situation and decide how much you can reasonably spend without using a credit card.
3. Chances are you’ll want to spend a little more on some people on your list and less on others. Estimate how much you want to spend on each person and create a zero-based budget based on how much you have to spend. If your family lives in the four corners of the country like mine does, don’t forget to factor in shipping costs! Are there more people on your list than money in your bank account? Prioritize (your spouse and kids probably come first, your dog-walker last on your list), and draw a line where the money runs out. For those below the line, either settle for a handwritten note in a Christmas card or get creative with some homemade gifts (fudge, granola, coupons for time spent together over a homemade dinner or at the zoo).
4. Jot down a few ideas for each person on your list. (My family always exchanges Christmas lists—tremendously helpful!) Before you hit the stores, plan what to buy each person and you’ll be less likely to go crazy on the spending.

Don’t forget to budget for Christmas decorations too—the tree, lights to replace the ones that burned out last year, ornaments to replace the ones the dog knocked off the tree…

If you know you have the tendency to overspend, use the envelope system and leave your credit cards at home. Withdraw your $600 (or however much you have to spend) in cash and keep it in an envelope. Use the envelope only for Christmas purchases, and when the cash is gone, you’re done shopping.

Think the damage is already done this Christmas? It’s not too early to start planning for next year. Total up how much you spent this year and divide that by 12 (11 if you want Christmas funded by Black Friday), and no matter what happens, set aside that amount every month.

Happy Shopping!

Questions or comments? Contact me here.