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How to Budget for the Holidays

Christmas Budget

How to Budget for the Holidays

The Handy Tax Guy No Comment

Tis the season to be budget friendly! Don’t worry we’re not here to take away the holiday spirit, all we want to do is to help you enjoy this year’s season without paying for it later. Many people today have the pressure of picking out the perfect gift for each close family member and friend. The built up anxiety of making everyone you gift feel special, can lead to overspending for the month of December.

This does not have to be your story. You can actually enjoy the festivities and have perfect peace by following the few tips and tricks we have when budgeting for the holiday season.

Why should you have a budget?

A budget keeps you focused and allows you to shop without any guilt because you have a plan. A budget also prevents any unforeseen crisis from happening and it actually makes you feel as if you have more money than originally planned.

How to budget for christmas

How do you prepare a Christmas budget?

1.You set a budget. What will be your max amount for the holiday season?

2. Try not exceed 2% to 5% of your annual income on the total budget. For example, if you make $50,000 per year, then your max Christmas budget will be $2500.

3.Start saving for the holiday season as soon as possible.

4.Set aside 2% of your income each month. If you’ve waited until the last minute, then count the number of paychecks left prior to Christmas and divide by the budget goal you’ve set. This number will let you know how much to put aside each paycheck. For example, if your goal is $1500 and you have 3 paychecks left prior to the annual holiday, then you would put $500 aside per check.

5.List each person’s name with the gift you will be giving and the cost.

Sample Holiday Budget

Recipient’s Name Item Budget Actual Cost
Tyler Smith Headphones $115 $89.75
Hope’s Charity Charitable Giving $500 $500

 

6.Make sure your budget includes miscellaneous items such as holiday décor, cooking, entertaining, traveling, charitable giving and more.

7.Know where you’re going to purchase each item and if there’s a particular time of the year the item usually goes on sale. Organization is key and it will ease your mind during all of the holiday commotion.

8.Purchase Christmas gifts marked for clearance post December 25th.  You will save an average of 75% with the after Christmas sales. The prices are sometimes better than the Black Friday deals.

Quick Tip:  Avoid impulse buying, which is one of the main causes for buyer’s remorse in the months to follow.

We hope this article helped you gain some control of your budget this year. Remember not to stress out. We encourage you to enjoy the holiday season amongst your family and friends. Don’t forget to check out The Handy Tax Guy FAQ page for any additional online tax questions.

Christmas Budget

 

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