How to Set up a Holiday Budget

Halloween. Thanksgiving. Whatever December holiday you may celebrate.

All of these are right around the corner and will be here before you know it. Have you thought about how you will budget for all of these upcoming events? In reality, we should have started in January, or even July, but it’s never too late to plan and budget!

Why should you budget for the holidays?

The main reason is to avoid going into credit card debt, or more debt for some of us. The second reason is to know what you can spend on gifts, food, and new decorations. You can make a plan of everything you need to buy for the holidays and look for the best deals. You know, instead of running out at the last minute to grab whatever you can find. Lastly, so you can enjoy the season with less stress!

How will you create a holiday budget?

First, think about where you want to be at the end of the year financially. Do you want to be in more or less debt? Are you saving for anything? Working on an emergency fund? What financial goals do you have for next year? What major expenses might you have come up? What are your priorities for the year? Why are you thinking about these? Because you don’t want to put yourself behind on these goals just to fund your holidays!

How to set up your budget:

Sit down and figure out your current financial situation.
- Grab a planner or calendar with September through December and mark all of your paydays. Estimate how much money you will have for each check
- Next fill in all of your upcoming bills and expenses. If you don’t know how much your electric bill will be, make an estimate. You can probably look at how much you paid last year and add a little more to be safe.
- Add up all your income and bills and then subtract your bills from your pay
- How much do you have leftover? There is your holiday budget starting point!
Create a plan for each holiday. If the holidays listed here aren’t ones you celebrate, swap them out for the ones you do. These are the ones we budget for in our house but I know not everyone celebrates Halloween or Thanksgiving.
- Write down everything you need for each holiday, including gifts, food, and decor
- Start collecting coupons, discount codes, and redeeming any points you could use towards items on your lists.
- Halloween
  - Costumes – how many costumes do you need? What can you reuse from previous years or things you already own? What do you need to grab?
  - Candy – Do you know how much candy you gave out last year? Are you going to grab it early and save it or do you need to wait until closer to Halloween? If you can get it early, you can grab regular candy on sale and not the “special” Halloween branded candy.
  - Decor – Take inventory, what do you already own? Do you need to replace anything? Do you want to get anything new?
  - Other – Is there anything missing you want to budget for? Do you do school cards or host a party every year? Write that down!
- Thanksgiving and December Holidays
  - Food – make a meal plan if you’re hosting. Write down what you’ll make and what you’ll ask others to bring. Take inventory of your kitchen. Write down what you need to pick up from the store. Also, shop early. Don’t wait until the day before. You will have more options and less stress! And don’t forget to get those coupons! You can find some online and add to your loyalty card and others you can print off.
  - Decor – Like Halloween, check what you have and determine if you want to update or replace anything. You might want to check any tree lights and make sure they work!
  - Other – Do you do a cookie exchange? Or donations to your favorite charities? Write all of it down! Do you need to travel? Wrapping paper? Cards?
- Gifts
  - Write down everyone you would like to buy gifts for.
  - Determine how much you want to and are able to spend on each person
  - Look for coupons, sales, and online discount codes.
  - If you know you’ll be out on Black Friday, you will already have your list and know exactly what you want to grab. But you may also see that toy your kid wants randomly on sale now and can grab it early!

Top Five Holiday Budgeting Tips

Keep it simple and sustainable. For example, you can gift children something they want, need, wear, and read. We always gift our nephews a toy, a shirt, and a book.
Avoid using credit cards unless you know you’ll pay off the balance in full every month. We use our credit cards and pay off monthly to get travel miles and cash back.
Keep your gift lists and other inventory lists with you when you are out. You never know when you will find a good deal!
Use a tracker to keep track of your budget and how much you have spent.
Set yourself up for next year. Add up what you spent this year and add 10%. Figure out when you need to start saving (January, July) and how much you’ll need to set aside. Make a bucket in your savings for Holidays (or a new account or a cash envelope – however you save).