8 Ways to Make a Christmas Budget and Stick to It
By Jon Vincent
Every year, we Americans try to stick to a reasonable Christmas budget. But every year, millions of consumers overspend, racking up credit card debt and draining bank accounts in the name of spreading Christmas cheer. According to statistics, over 50% of Americans admit they spend more than they can afford on Christmas gifts, and nearly 40% use credit cards to cover the cost of the holidays.
Setting a Christmas budget is important if you want to avoid going into the red. Here are nine tips on making a Christmas budget and sticking to it:
1. Determine how much you can realistically spend. It’s tempting to dream big and want to surprise people with extravagant gifts. However, you’ll cause yourself a great deal of financial stress instead of enjoying the holidays.
2. Put money aside each month of the year. Christmas always falls on December 25th, so it shouldn’t be a surprise expense! Start preparing for the holidays as early as you can. Even if you can’t spare much, putting an extra $10 into a savings account each month will add up by December.
3. Do your Christmas shopping throughout the year. If you see an item on sale in July that you think your mom will love, buy it. Check out Black Friday and Cyber Monday sales for huge savings on electronics, apparel, jewelry and more. Not only will you save money, but you won’t have to spend as much time in the busy malls come December.
4. Make a list of everyone you’re buying for. This includes family members, friends, your child’s teacher, your mailman…Next, determine how much you plan to spend on each person. If the total is more than your budget, lower the amounts. Don’t be afraid to cross off names of people you don’t absolutely have to buy for; send a nice card instead.
5. Get creative. Rather than shelling out cash on store-bought gifts for everyone on your list, give a neighbor homemade cookies or offer to babysit for a friend who’s a new mom. People will appreciate a thoughtful gesture much more than a pair of socks or a Christmas-themed mug.
6. Use cash instead of credit cards. Credit cards allow you to swipe and spend without a second thought. By handing over your hard-earned cash, you’ll understand the value of a dollar. Leave your credit cards at home when you head to the mall, and if you’re using a credit card to shop online, write down each amount and pay everything off before the New Year.
7. Know what you’re buying. Wandering the crowded malls is exhausting, and you’re more likely to be tempted by an expensive item if you have no clue what you’re looking for. Brainstorm before you hit the stores and write down a number of gift ideas for each person on your list.
8. Don’t forget the extras. Make sure you budget for extras such as wrapping paper, charitable gifts, and hostess gifts for holiday parties.