7 Tips to Budget Holiday Spending

Guidelines for Planning Your Holiday Shopping Budget

7 Tips to Budget Holiday Spending
November 27, 2016

The holidays are upon us. For those of us feeling a financial pinch, this can be a time of stress and worry rather than one of happiness and caring. We hope that this article will remind you how to do more with less and how to stick to a budget for gift-giving.

As for the shopping public, one of the greatest stresses for Americans during the holiday season is gift-giving. Finding just the right gift for every person on your list can be overwhelming, especially if your list is long. Just like the advice you receive for how to enjoy the holidays — to eat, drink, and be merry (without overdoing it and indulging) — we encourage you to avoid overdoing it when giving gifts as well. If you go to a holiday party, this means limiting your alcohol intake, eating a half rather than a whole portion of pecan pie, and laying off the eggnog. The same applies to giving gifts; We encourage you, again, to not overdo it.

What does that mean? It means to follow a few simple rules. And by this, we mean to really follow the rules!

Rules for a holiday spending budget:

1. Set some expectations - Setting expectations means that you need to be realistic about your finances and what you can afford to spend to accomplish your goals. You've heard it before: it's the thought that counts. So think about how to use your money wisely in a way that you can have the greatest return.

2. Set your limits - No one wants to hear the word "budget" when it comes time to holiday shopping. Nevertheless, if you are in a financial crunch, this is exactly what you need to do. For example, even though I tell my mother-in-law not to get me anything, she still manages to find a gift (or several) that I really need or want. Usually, this consists of either one reasonably-priced gift or several smaller ones. Regardless of what gifts I receive from her, they are always within a certain dollar limit. My in-laws set a budget of X dollars for each of their kids, Y amount for each of their kids' spouses, and Z amount for each grandchild. She solicits suggestions from other family members and stays within her budget for each recipient. It's a good system: she starts planning before Thanksgiving and searches for sales and bargains throughout the next month or so. All of her family members understand her budget and know that what they receive will fall within that price range. Again, here is an example of setting expectations, but in this instance, the recipients get the message and knows your limits.

3. Get organized - Establish your list of recipients and the amount of money you can afford to spend on each person. Remember, this does not mean charging everything to your credit card that you cannot pay off when it is due in January. Just as you need to live within your means the other 11 months of the year, this too should be a plan that takes into account the amount of money you have saved or have on-hand that you can use for your gifts. If you want more credit, check out MoneyTips' list of credit card offers.

4. Resist the urge! - We all just want everyone to be happy during the holiday season. In order to make that happen, we sometimes think that giving the ultimate gift is what will do it. It won’t. Come down from that ledge, and it is a ledge, because if you fall into the mindset of going all out, you will find yourself in a large hole when your bills are due. Of course your little niece Suzy would be thrilled to get the latest and greatest doll, cell phone, or running shoes, but that will not be in the cards if you stick to the simple rules of your budget. Most people who understand the value of a dollar, and perhaps have some indication of your situation or the economy, should be grateful for whatever gift you get them.

5. Get creative - A nice moderately-priced bottle of wine, a framed drawing that Timmy painted in Kindergarten, or a double batch of your fantastic snickerdoodle cookies would surely bring a smile to most loved ones' faces. As an alternative, some other type of "sweat equity" gift can mean just as much something from a department store. This might include a hand-made certificate for free babysitting or cat-sitting services, yard work, and similar tasks that might ease another's burden. Don't you think Uncle Carl would prefer a home-cooked dinner prepared by you over a box of candy or another pair of black socks?

6. Tally up all the costs - If you need to travel this holiday season, take that into account as you make your budget. If you are spending $1500 to fly the family to Aunt Clara's, no one would expect you to also spend a few hundred dollars on gifts for her and her family. Well, almost no one. If Aunt Clara and the gang feel short-changed when you fail to arrive with several steamer trunks full of surprises, it just may be your last holiday trip to her place.

7. Suggest Secret Santa – Secret Santa is a great way to save money for a large gathering of friends and/or family. You may not want to buy gifts for everyone who shows up, but certainly don't want revelers to feel snubbed. Instead of buying gifts for all (or just the adults), each participant is expected to buy a single gift for a single person under a predetermined budget. The Internet has many websites that can help generate a random selection, so people know for whom they're shopping; some even allow recipients to specify a wish list. At the party, recipients can open their gifts, and try to guess who was their Secret Santa, adding to the fun.

Remember, this is the season of giving — not the season of spending, as most merchants would have you believe.

Set your expectations and your budget, get creative, don't overdo it, and be merry.

Photo ©iStockphoto.com/Amenohi

  Conversation   |   15 Comments

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Carla Truett | 11.18.15 @ 18:01
I make lists and stick to them. Luckily, I don't have many to buy for.
Steffanie | 11.18.15 @ 18:01
It can be very hard to stay in a budget for me as I love to give gifts, but I also like o teach my kids that getting them isn't the only reason for celebrating. Thanks for the list.
Erin | 11.18.15 @ 18:02
We keep it simple. Usually we only do gifts for the kids, and we set expectations with them so they are prepared when it is time for gift-giving. We try to set the focus on family rather than possessions.
trish | 11.18.15 @ 18:02
I shop all year long! Grab sales after Christmas for all the wrapping and bows/boxes for the next year. That is a huge cost saver! Even down to the scotch tape! And then whenever I see sales, especially in the Clearance sales in the summer, I stock up on toys to give out for birthday parties/Christmas. I typically only have to buy the larger presents during the holiday shopping season!
Daniel Dohlstrom | 11.18.15 @ 18:02
I start my planning as soon as I finish up shopping for the current year. Set goals, make lists and stick to budgets .. spreading it out makes it so much easier
Elaine | 11.18.15 @ 18:02
Luckily I learned years ago to set limits and goals. I normally do not break them. One year when things were extra tight, everything was handmade. I actually think that ended up being everyone's fav holiday gifts that year.
Beverly | 11.18.15 @ 18:02
Some great tips. I do tend to go overboard this time of year, but it is my favorite holiday. But it is smart to keep track so you don't get out of hand.
Sarah | 11.18.15 @ 18:03
I have a list and stick to it for the most part. I have a very strict budget and there's just no going over it. I celebrate if I can deal it down! I also love being creative with gifting. Baking may be my very fave way of saving... Yes, baking can cost less than some gifts!
Amanda | 11.18.15 @ 18:04
I make lists, keep a budget, and earn as much free money from other sites to pay for the holidays. Some very nice information above.
Britt | 11.18.15 @ 18:05
I try to make a list of what I am buying for who, so that I can stick to a budget. Lists have been my best friend when it comes to christmas shopping.
joann | 11.18.15 @ 18:05
A budget is what I do, and i stick to it as closely as possible. I tell everyone i have a per person limit and that is what i stick to. It also keeps receivers from expecting high dollar gifts and being disappointed Christmas day.
Jennifer Sears | 11.18.15 @ 18:07
We generally try to stick to just one big gift or several small gifts. We always set a price limit before we start, too.
Kailie | 11.18.15 @ 18:07
I started saving up for Christmas in Early October and then made a strict budget of how much I was willingly to spend on each person I was getting something for. So far, it's working perfect.
Nancy | 11.18.15 @ 18:08
I like to shop all year round. It lessens the impact on my budget.
Kyle | 11.18.15 @ 18:09
Lists work for me. It keeps things simple and organized.
$commenter.renderDisplayableName() | 11.21.17 @ 23:20

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