Christmas will be here before you know it. Have you given thought about the gifts you will purchase for friends and family? While it’s important to realize Christmas is not always about gifts and money, it is an opportunity to be generous. Even if you’re normally frugal, Christmas may be a time to spend a little more than you ordinarily would on those you love. Splurging a little during this time of year doesn’t have to wreck your finances. Here are a few key suggestions to help establish budget for gift spending.
Set a Budget to How Much You Should Spend
The first thing you should do it to set a maximum amount of money you have available to spend. If you don’t set a budget, you may spend more than you expect or can afford and may even put it on a credit card.
Setting a Christmas budget may help keep your spending under control. It’s no fun to come away from the holidays in debt. If you properly establish a budget and stick to it you may not feel as much financial anxiety.
Make a List and Brainstorm Gift Ideas
After establishing your budget, you can make a list of everyone you are planning on buying a gift for. Your list may include immediate family, extended family, friends, and co-workers, and as help, try to include the dollar amount you want to spend on each person. The overall amount cannot be great than your total budget. If it is, then you need to adjust the amount for some people on your list or you may even decide to remove people off your list.
Next, brainstorm some gift ideas within your budget. By organizing your Christmas shopping list within your budget, you ensure you don’t miss anyone and stay within budget. Getting and staying organized allows you the time to consider what the person really wants and compare it with how much you have allotted that person on your budget.
You should keep a list of each gift you purchase and the amount spent on each gift so you do not get more gifts for anyone than planned or spend more than you budgeted. Your list also allows you to comparison shop for the best price and ask others about where to find the best deals on an item.
Use a Simple Tracking System
Once you’ve set your Christmas budget and created your shopping list, you’ll need a simple system to help you keep track everything. Be sure it’s simple; if it’s too complex you may not stick with it.
Try using a cash envelope system, which just involves taking a few envelopes, writing the names of each person on them, as well as the budgeted amount. This is one of the simplest systems to use. When the money is gone, it’s gone, and you are finished shopping for that person.
There are apps for your phone that you can use to track your budget. Some apps allow you to track your overall budget and some will allow you to track your budget per person. A budget app doesn’t need to be complicated to be effective. All it needs to do is create a visual of your spending. This makes it easy to view and see exactly how much you’re spending and where you are against your budget.
Encourage Christmas Gift Exchanges
A great way to save on Christmas gifts is to suggest doing a Secret Santa exchange. With a gift exchange you only have to shop for one person and you can set a price limit. This may allow you to focus on buying a more personal gift for one person instead of several gifts.
Many people like gift exchanges as it may make holiday shopping a lot less stressful. Plus, it is generally easy to set-up. This works great for extended families, especially as they continue to grow.
Shop by Yourself
By shopping alone, you may be less likely to over spend, especially if you have friends that have bad money habits. You can easily get distracted from your plan by someone else convincing you to buy something you had not planned or anticipated.
Maintain Self Discipline
This may be the most difficult part to sticking to your budget. You should make a firm pledge in advance that you will not go over budget. So, when your budgeted money runs out, you must stop shopping. This can be difficult because holiday shopping can be very stressful and trigger emotional spending.
Now that you’re armed with these Christmas budgeting tips, hopefully you’ll be able to wisely spend your hard-earned cash. Remember, gifts don’t have to cost much to be wonderful. Take some time to carefully think about each recipient and what you love about them. After all, this is the spirit of the holidays.