November 2020

The holiday season is one of giving, which often means it is also the season of spending.

Help take the stress out of the holiday season by creating and sticking to a holiday budget. making a holiday spending plan will help lessen your stress, plus will keep you from overspending and potentially racking up debt this holiday season.

Begin with a List of Holiday Expenses

Begin by making a list of all of your expected holiday expenses. This includes gifts, cards, wrapping paper, traveling expenses, gift exchanges at work, and charitable donations.

This will give you a basic idea of things that you will need to pay for in addition to gifts. Many people only think about the gifts and wonder why money is so tight in December, but they forget about these incidentals.

Decide on Your Spending Limit

Determine how much you have available to cover Holiday expenses this year. When you are considering this amount be sure that you only use money that you have set aside for the holidays or extra money that you can find in your budget.

Do not plan to spend more than you have saved with a plan to pay it off later. Paying for holiday gifts on a credit card is never a good idea.

Although it’s the season for giving, it doesn’t mean you should exceed what you can truly afford. According to Kirk Jewell, a certified financial planner (CFP) and founder of Global Financial Services, “a good rule of thumb is to spend no more than 1 percent of your overall income on the holidays.” So, if your combined household earnings are $150,000, no more than $1,500 should be spent on your holiday budget.

Assign Money to Each Category

Divide your budget according to the different spending categories you’ll have this holiday season.

This means assigning a specific amount for each gift, as well as each outing, office Christmas party, or another event. Knowing how much you have to spend on each gift will help you narrow down ideas before you shop.

Make a Shopping List 

Create a list for your holiday shopping. You should have one or two ideas within your price range for each individual.

If you take the time to plan ahead for major sales, you may be able to find some great gifts for less money than you budgeted for, which is another plus.

Track Your Purchases

Once you begin the holiday season, keep track of all your purchases. Bring your gift list, along with your budget sheet, with you on every shopping trip. Additionally, be sure to keep track of the cost of your holiday-related outings and other spends so you will be able to more accurately budget next year.

As you begin to purchase gifts and spend money, be sure to subtract the amount from your running Christmas budget total. This will let you know how well you are sticking to your budget and will make it easier to make adjustments between categories if needed. Tracking your spending is the biggest key to sticking to your budget. 


When holiday shopping, stick to a cash-only system. Putting the gifts on a credit card makes it easier to overspend. 

Take advantage of Black Friday sales. These sales can save you a lot of money. Reviewing your list and the sales ahead of time can help you maximize your savings.

Shopping online can save you money and time as you comparison shop. Don’t forget to look for free shipping codes and allow plenty of time for your gifts to arrive. Many online stores offer extra savings and free shipping over the Black Friday weekend. Be sure to check out the Cyber Monday sales, as well.

Always add a few extra gifts to your shopping list. These gifts should be generic in case you receive a surprise gift or forget to buy for someone. It can ease your mind and save you from scrambling to find something at the last minute.

Earn extra money to cover your holiday expenses by taking on a holiday job. This may be a good short-term solution if you forgot to budget for the holidays during the year.

Information from Motley Fool