The most wonderful time of the year can also be the most expensive time of the year for many families. The American Consumer Credit Council reports that the typical American spends $935 on Christmas gifts alone! While it does help to keep the spirit of Christmas in your heart, sometimes you need practical hints to make sure you can keep your spending in check. This article will provide 5 tips for creating a Christmas spending budget that you’ll be able to stick to.
1. Take inventory of the items you already have.
You’ll probably be less tempted to overspend on decorations and gifts once you look over what you already own. So, raid the attic, basement, or closet and make a list of what could be used again this year.
Can your old decorations be spruced up for this year? Do you have old knitting, embroidering, scrapbooking, woodworking, or general arts and crafts supplies you could use to make gifts for people this year?
You probably own more “Christmas stuff” than you think.
2. Figure out how much you’d like to set aside for holiday expenses.
Now that you know what you already have, you can come up with a realistic picture of how much you’d like to spend this year.
Don’t just consider the cost of gifts, either. According to Ron Hatfield, family budgeting specialist for West Virginia University, families should consider the costs of new decorations, stamps, cards, special foods, and Christmas clothes. We would also include the cost of holiday donations you plan to make and any travel expenses.
3. Make a list of who you’d like to buy gifts for and budget an amount for each person.
Now, we’re not talking about who you’d ideally like to buy gifts for—that could be just about every person you come into contact with each week. You need to make a practical list of who you think you can afford to buy a present for in this difficult economy.
Then, set aside a dollar amount for each person. When you’re done, add it all up and see how the sum compares to your total Christmas budget.
If you’ve overshot your budget or are too close for comfort, you will either have to buy fewer gifts for each person, buy less expensive gifts, or cut people from your list. You may end up doing all of the above.
Keep in mind that cutting someone from the list doesn’t mean they aren’t getting a gift from you, however. These are just the gifts you’re setting money aside for. You can always give them a homemade gift or card.
4. Bring your rewards credit card shopping with you.
Some credit card companies offer special rewards to their customers during the winter holidays. These could be bonus rewards points, special discounts, or even free gift cards! A free gift card could mean one less gift to buy.
So, look up your credit card rewards program and see what’s being offered. Then, write a reminder to yourself on your Christmas shopping list so you don’t forget your credit card at home.
5. Stay accountable for what you spend.
Sticking to your budget is, of course, the hardest part. One way to make it easier is by recruiting other people to hold you accountable for what you spend.
Your partner can be a good choice, as long as they are a responsible spender. Once you decide on a Christmas budget together, you can resolve to help each other stay on track.
To make it easier to keep track of purchases, West Virginia University’s Ron Hatfield recommends using just one credit card for Christmas spending. If it helps you, put your statement or receipts up on the fridge. If you know your family will see them, you’ll be less tempted to splurge.
Do not post how much you’ve saved for the holidays on Facebook, MySpace, or Twitter, however! Your updates may reach more people than you think, and these messages can look like invitations to come rob you.
These 5 tips for creating a Christmas spending budget are simple to understand—the hard part is following through with them once the holiday season kicks into full gear and temptations to overspend appear on every channel and window display. Stay cool and keep everything in perspective. In 10 years, no one will remember how much you spent on their gift or whether you reused your old tablecloth. What they’ll remember is how their gift made you smile, the conversations you had over dinner, and whether you helped make Christmas a joyful time for your family.
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