Are you tired of dreading your January credit card statement? Then, check out these tips on how to budget for the upcoming holidays.
The holiday season is a time to enjoy and relish.
Your holiday budget allows you to head confidently into the season and helps you avoid overspending.
You can also better plan for trips or gifts and start saving money if needed.
So, if you’re ready to have financial peace of mind this holiday season, keep reading for some holiday budget tips!
Related post: 7 Smart Holiday Shopping Hacks & Tips
How to Budget for the Holidays
List all upcoming events and big life moments.
Consider what activities you will be participating in and write down what each event entails you to do.
Then allocate a budget for each event or activity (i.e., how much you’ll need to set aside for it.
I’d also recommend including an outfit budget, especially if you know you’ll need to buy a new outfit specifically for the occasion.
An example of this would be purchasing a new Halloween costume or an outfit for a themed holiday office party.
Budget for all anticipated holiday gifts.
List out all the people you will give gifts to this year. Then create a budget for each person.
Be realistic about your budget for each person because, at this point, it is better to over save than to underfund.
Another thing I like to do is to write down a few gift ideas next to each person.
Doing this allows you to see how much the item would cost and will enable you to keep a pulse on and take advantage of any price fluctuations.
Review your current financial situation.
Look at your monthly income and monthly expenses to find out where you currently stand.
Compare against how much you plan to budget for all events and gifts.
Then, consider whether you need to create a separate savings plan to afford all your holiday activities and gifts.
Create a holiday savings plan.
When you know you need to save for the upcoming holidays, you’ll want to take a look at how much you plan to spend and back out how much you need to save each month to afford it all comfortably.
For example, divide the amount you need to save by the number of months between now and the holidays. This will give you the total amount you want to save each month.
Next, review your current spending habits and reallocate how much will go towards expenses, your primary savings, discretionary, and your holiday budget each month.
Revisit your current monthly expenses and consider if all costs still make sense in your life or if you can cut out any.
Related post: 15 Easy Ways to Save Money
Set aside money for an emergency fund.
Give yourself a limit for what you’re able to spend outside of the holiday budget.
Consider creating a holiday “emergency” fund. This fund will be for any unexpected activities or expenses (spontaneous trip to Disneyland? Extra Halloween party, meaning another Halloween costume?) that may arise.
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