How to Set up a Christmas Budget

It’s easy to overspend on Christmas gifts. In fact, in 2018 people said they would spend an average of $1,0007.24 during the holiday season. To make sure you don’t go overboard on spending this year, it’s a good idea to set up a Christmas budget. Here’s how to do it.

1. Determine How Much You Have to Spend

Just because the average person spends over $1000 on gifts doesn’t mean you have to. What you spend should depend on how much cash you have.

If you’ve been saving up for Christmas gifts throughout the year, now’s the time to see how much you’ve been able to save. This will be your budget.

If you haven’t been saving, figure out how much money you have left over at the end of the month after your bills and other necessary expenses have been paid. This will be your budget.

Whatever you do, don’t take out a loan or fall back on credit cards to pay for Christmas gifts. The last thing you want is to add to your debt this holiday season.

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2. Decide How Much to Spend on Each Person

Once you know how much you have to spend, write it down on a piece of paper or enter it into  Excel sheet on your computer. Underneath the total, make note of each person you need to buy a gift for this year. This could be family members, close friends, or even co-workers. Then, decide how much should you spend on each of them. If the total of how much you spend on each of these people is higher than you budget, reduce your budget for each person or remove people from your list altogether (or both).

Your total needs to equal or be less than your budget, ex:

You don’t have to buy something for every person you know, and you don’t need to spend a ton of money on those you care about. Remember, it’s the thought that counts, so be smart about your spending.

It’s always a good idea to pad your budget just in case you forget someone. For example, does your workplace do a Secret Santa? Do you have additional friends or relatives that you need to add to your list? Leave extra room in your budget for unexpected gifts.

3. Track Your Budget

Stick to your budget by keeping track of what you spend on Christmas gifts. Make sure that you only spend the amount you said you would for each person. Focus on gifts that will mean the most to your loved ones—not on the price tag. And remember: you don’t need to spend money just because it’s in your budget. If you can spend less, you’ll come out ahead in the long run.

4. Look for Deals

One great way to make sure you’re sticking to your budget and getting your loved ones what they really want is by looking for shopping deals. Whether you use coupons, find stuff on clearance, or brave the crowds on Black Friday, you can often find great gifts for less than you would normally pay.

5. Create DIY Gifts

Even though you added extra padding in your budget, there might still be some friends and family you forgot. But that doesn’t mean you should take money from your emergency fund or pull out a credit card. Instead, you could making your own gifts for anyone you may have forgotten along the way.

Cookies, homemade ornaments, and gift baskets are perfect, DIY-friendly gifts that your family and friends will love. And since you put time and effort into making them yourself, these gifts can feel even more special than those you buy online or at the store.

6. Don’t Forget about Holiday Cards

Everyone wants to feel appreciated and loved. A gift in a box is just one way to express that you care. But you don’t need money to show someone you love them. Sometimes the greatest gift you could give is a heartfelt card. It hardly costs anything, but it could mean the world to a friend or family member.

It’s the Thought That Counts

You might feel pressured to buy extravagant gifts for friends and family this holiday season, but a price tag isn’t what matters most. No matter what gift you give them, your friends and loved ones will care more about the fact that you were thinking about them and wanted to show them you care.