Budgeting for Christmas

Budgeting for the Christmas holidays is always a challenge. For one thing, you often feel obligated to buy for people that you don’t see and barely have contact with throughout the year. Of course, for your children, you often want to buy the biggest and best toys that you can afford. Naturally, you cannot forget the decorating and the extra food expenses that also come along with the Christmas season. By the time you are done, it can be overwhelming for your budget, often leading to the over-use of credit cards. The balance on these cards often takes until the following Christmas season to pay off, just in time to run them up again. It is not however, impossible to keep yourself within a budget if you plan carefully, and prioritize where you will spend the most money.  

The first thing you need to do when you are budgeting for the Christmas holidays is to prioritize where you need to spend the most money, and also where it is most important that you spend money at all. Of course, for most people, this starts with the immediate family, usually the children. The Christmas dinner is usually a pretty important priority as well. From there, you can go on to extended family, then onto friends, and so on.

It is usually not important to buy gifts for co-workers unless there is a specific gift exchange at work, or you have some co-workers who have also become special friends. Bosses are pretty low on the priority list for gifts as well, although some people prefer to give gifts to their bosses with the hope they will be remembered when it’s time for a raise. However you choose to set your priorities, make sure that it’s an arrangement that you are happy with, and can afford.   

From there, you need to set a total budget for your Christmas spending that includes food, going out, decorating and gifts. You will have to determine how much you will spend on each person that you will be buying for. The more people that you have to buy for, the smaller your budget will be for each one. Make sure that you set a budget that is realistic for the number of people you have to buy for, but is also within reach for you, preferably without using more credit cards than you can pay off in a single month, if you have to use them at all.

Also keep in mind as you set your budget that you do not have to buy your children a lot of toys, but simply one or two nice ones. The more distant the acquaintance you have with someone, the more likely it is that they need little more than a nice card to let them know they are being thought of. This is also where the prioritizing comes in. If you don’t have enough money in your budget to buy gifts for those that are not very close to you, you can either bake them something, or you may have to forgo giving gifts to those people.

As long as you keep these rules in mind, you will not go broke during the Christmas season. For the following year, if you feel that you need more money than you had this year, you can start setting aside money for Christmas from the beginning of the year.