This is part one in a four part series on doing Christmas on a Budget. See part two here.
I’m not the best at budgeting. That’s probably not the best thing for a personal financial blogger to put out there, but there it is.
This kind of micro-budgeting seems much easier for me to get my head around. And Christmas is one of those times that is perfect for micro-budgeting.
I’m currently in the process of budgeting for Christmas, so I thought I would take you along with me. This will actually be a series of four posts:
- Today’s post is how to set up a Christmas Budget.
- The three posts that follow will use the three questions method to help you save money on Christmas.
How to Budget for Christmas
Christmas budgeting would seem to be all about the presents. That’s certainly a big part of it, and we’ll get to that in a moment, but first let’s talk about all the other things holiday budgeting is about.
Start by making a list of all of the places you spend money at Christmas besides gifts. Anything related to Christmas or the holidays is fair game. Here are some ideas to get you started:
- Christmas cards
- Postage for mailing cards and gifts
- Wrapping paper & supplies
- Baking ingredients
- Christmas dinner food
- Christmas décor (tree, ornaments, lights, etc.)
- Special clothing
- Entertainment expenses (dinners out, Nutcracker tickets, etc.)
Depending on your situation, you may or may not spend money on all of these items. Or you may have other expenses that aren’t represented here.
Either way, the more complete you can make your list, the more helpful your Christmas budget will be.
Add in Gifts
Now is the time to add in categories for gifts. Write down every single person you buy for:
- Family members
- Hair Dresser/Postman
- Hosts and hostesses of the parties you attend
Don’t forget to include a line for stocking stuffers. These can sometimes be forgotten in the budgeting process and — despite their small size — they can add up to big money.
This is also a good place to include your holiday giving. Many of us make extra contributions to our places of worship or other charities at this time of year so make room for those so they don’t get overlooked.
Now that you’ve got every place you spend money at the holidays listed, pencil in dollar figures next to each item. If you have records from previous years, use them. But if not, don’t sweat it. Just make your best guest estimate of what you spend for each category or person.
Now total it all up.
Does it seem like a lot? It probably does. With all this written down in one place, you can see why the holidays are so expensive.
But you don’t have to spend that much. In the coming week, we’re going to apply the three questions method to your holiday budget so you can cut your spending, but without sacrificing any of the good stuff.
In fact, not only will you save money, but your holidays should seem a little simpler, saner, and more rewarding. So stay tuned for that.
In the meantime, what things do you spend on at Christmas or the holidays? Have I left anything off the list?
This post is part of Works for Me Wednesday.