The sooner you are aware of possible overspending, the sooner you can do something about it.
It’s too easy to let the spending during the holiday season get out of hand. If we spend too much during December, January can be a very difficult month. The best way to save yourself from overspending is to stick to a budget. Here are some holiday budgeting tips to help you plan your spending:
Thoughtfully buying gifts
If your family likes to celebrate Christmas by giving gifts, decide on a specific amount for each person. Discuss with your family how much they intend to spend on gifts. Ask them to create a wish list so you can buy them something they really want. When you have a small family, it’s easy enough to find a proper gift for each person. But when you have a very large family, consider doing a Secret Santa. That way, each person can get one proper, useful gift instead of lots of small, possibly irrelevant ones. Remember to include the cost of wrapping paper and cards in your budget.
Remember to include your travel costs such as fuel and snacks in your budget. Also, decide on a set amount you can spend each day by dividing the total amount you have available for spending (after your usual monthly deductions) by the number of days you will be on holiday. Try to stick to this daily amount to keep you on track. If you overspend on one day, you can easily correct it by spending less the next day. This will prevent you from thinking that you only overspent a little today, every day. Small amounts accumulate into large amounts! If you don’t have money left for ice cream today, rather buy some tomorrow.
Food for the festivities
Perhaps you would like to splurge a little bit on a large family lunch or dinner. Decide on a certain (reasonable) amount and stick to it. Include the things like serviettes, toothpicks, candles, crackers, or anything else your family likes, in your budget.
Some families like to do some fun activities like watching shows at the theatre or going to markets during December. Try to plan everything in advance so you know how much to budget for each outing. Allocate some money for travel costs and food for the outing.
Shop early in December
Don’t leave your shopping lists for gifts and groceries lying around until the middle of December; rather do your shopping before the 16th or so. Shops only get busier closer to the end of the year. Some shops even claim to have specials later in December; increasing the price first before giving you a discount. This leads you to believe you’re paying less, when, in fact, you are paying more than it cost originally.
Don’t fall for specials
Tying in with the previous point, don’t just assume that something on special really is cheaper. Do some investigation, and don’t buy bulk specials unless you really need it. It’s very easy to buy unnecessary items just because you think you are saving money.
Don’t count your chickens before they hatch
Everybody would love to get a bonus, but before you see the extra cash in your bank account, don’t plan your spending with it in mind. It might not happen at all, or it might be less than you expected. Rather plan your spending with your normal salary and extra savings you have available. If you then do get a bonus, it’s, well, a bonus!
Write everything down
Print out a calendar and write up the daily spending amounts according to your planned budget. Stick it on the fridge or somewhere you will see it every day. Add the actual amount you spend each day so you have a visual representation of your spending, and make sure it is on track. Also write out the list of people you are buying gifts for, the amount allocated to each person, and the actual amount you spent on the gift. The sooner you are aware of possible overspending, the sooner you can do something about it.