how to create a christmas budget the right way | have a stress free christmas this year by making a budget for the holidays with this easy guide

The holidays are coming! Is anyone else as excited as I am? I’m writing this blog post near the end of September and I’m not at all embarrassed about the fact that I’m wearing a Christmas sweater. I currently look like a gingerbread man, jealous? You should be.

Anyway, the holidays are nearing and it seems like this time of the year always goes by exceptionally fast. That’s why it’s oh so important to make sure that you’re starting your holiday budget as early as you possibly can. That’s why I didn’t want to wait until November or December to write this post, I really wanted to make sure that you guys could start working on it now to really set yourselves up for success!

*Be sure to share this blog post on Pinterest so your followers can enjoy it too! Thanks xo 

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How to Create a Holiday Budget

What To Do Before The Holidays

I know you’re probably reading this sometime in between the day it’s posted and December 25th, but I want to start by talking about something that’s really helped me iron out my Christmas budget each year and that is sinking funds

If you want to do a deep dive into sinking funds you can check out this blog post, but i’ll give you a little explanation about how you would use them for Christmas specifically.

So, let’s say that on average your family spends $1,500 on Christmas each year. Most years you end up just putting everything on a credit card and paying it off (with interest) for the rest of the year and you repeat the same behaviour the next year. Wouldn’t it be nice to get out of that horrible pattern?

Well, that’s where sinking funds come in! Basically, you take the total amount of money you’d need to have saved by December 25th and divide it by how long you have to save it. So we’ll say you start saving on December 26th of 2018 which means you have 12 months to save $1,500.

That equals out to $125 per month. Wouldn’t it be easier to add a $125 into a savings account each month than to pay off a credit card for the rest of the year? It makes a lot more financial sense.

You may not be able to set up sinking funds for this upcoming holiday season, but I highly suggest you check out our expanded post about sinking funds and try your best to try it for next year. It’s seriously life changing.


Why You Need Two Separate Budgets

When most people think of a holiday budget all we really think we need to budget for is gift giving; however, the holidays are about much more than just gifts.

There are a ton of personal budget items that you’re going to need to account for as well. This is why I think it’s an awesome idea to not only having a gift giving budget, but to also have a completely separate personal holiday budget.

The average family spends over $1,000 on gifts alone which means that when you factor in the amount of money spend on travel, party hosting and food, your budget can get very confusing if you don’t have it separated.


Personal Holiday Budget

Since we’ve discussed how the holidays aren’t just about gift giving, we need to figure out all the other places you usually spend money over the holidays.

These are all things you’re going to want to figure out way before the holidays hit so you can plan intelligently before it happens! Here are some examples of other categories of spending you might incur during the holiday season:

  • Specialty Food & Drink: We all have our guilty pleasures over the holidays, those certain delicious treats that we could never justify buying any other time of the year because of their hefty price tag, but for some reason it feels allowed during the holidays because it’s a special time of year! This also includes creating a budget for your actual Christmas dinner! YUM.
  • Holiday Travel: Travel around the holidays can get really expensive, rather quickly. You need to make sure you have a budget set in place to account for gas money, plane tickets, train tickets, snacks, and whatever else you might need to go visit your family members during this time
  • Hosting/Parties/Toiletries: Hosting parties and having people stay at your place over the holidays is one of the most expensive parts of this season. You need to account for food your guests will eat, any extra linens you may need, extra laundry you may have to do, as well as for things like toilet paper that you’ll inevitably have to buy when more people are using your bathroom. The little things add up rather quickly!

Gift Giving Budget

The first step to figuring out how much money you need in your gift giving budget is to write down every single person who you need to buy gifts for. It’s really important to not forget anybody, even if the gift will be less than $20. We don’t want any surprises here!

Once you have every person written down, assign a monetary budget for their gift. Now, don’t think about this as how much you value a person because that can be a slippery slope to spending too much money on everybody. Obviously, there are some people who you are going to spend more money on, but that doesn’t mean the other people aren’t important to you!

It’s incredibly important for you to stick to these numbers when you’re out buying presents because you need to save money and stick to that budget!

One important thing to remember during the holidays is that if someone comes by and drops off an unexpected gift, you don’t have to reciprocate if you don’t want to. Gift giving doesn’t need to be a two way street if you don’t have it in your budget. Give yourself some room to breathe and don’t be too hard on yourself if you can’t return the favour to every body.

If you’re forced to buy some smaller, less personal gifts for people under $20, search for it on Pinterest! There are hundreds of bloggers who make gift guides that are absolutely amazing at giving you good ideas for some pretty sweet gifts.

Bonus Tips

  • Buy as many gifts as you can during Black Friday/Cyber Monday. If you have as much social anxiety as I do, I highly suggest taking advantage of all of the amazing online deals you can get during Cyber Monday. You’ll find most of the gifts you need for way cheaper than in store and you’ll get all your shopping done way before Christmas! Just make sure you pay attention to ship by dates.
  • When booking travel over the holidays, make sure to use the tips over in our post all about saving money on travel to get the most out of your trip
  • When you are shopping in person try to only use cash when going out. Since we decided that each person needs their own gift budget, make sure you have this money separated so you don’t mix it up or spend too much money on one person and have to go over budget for another.
  • When you shop online use as many free money saving tools as you can, check out Ebates and Honey for two awesome options. You can also check out our post all about Saving Money Online Shopping for other awesome tips & tricks to save
  • Don’t forget about sinking funds for next year!
We all want to have a great holiday season but sometimes Christmas can get expensive and we end up in debt. Let's learn how to create a christmas budget that will help you calm your holiday spending #holiday #christmas #budget