There is so much around the web this time of year addressing gift guides and spending and consumption, but very little about how to responsibly prepare for the holiday spending. I am so interested in getting better at budgeting and being a good steward of what I have, so I wrote this post partly to share what I've learned, and in hopes that you all have some great tips to share in the comments section, too!
The holidays can be a tricky time. So much life, fun, love and energy. So much family time. So many shared meals, gatherings of friends, decking of the halls, sparkling of beverages and opening of gifts. But all the celebrating can be hard on the budget. I've spent many years trying to figure out how to best manage our finances when it comes to the holidays, because in our own family (extended - on my side and Stevie's side), we have over a dozen birthdays during the holiday months. Which makes for even more celebrating - and even more spending. Being a person that really values gift giving and selfishly enjoys giving presents, I never want to skimp on gift season. I just want to figure out how to get the most bang for my buck and also give really special, quality, meaningful and unique presents to my people. It's so so SO much fun when you give your loved one something they really wanted - or even better, something that had never crossed their mind, but that they adore. I just love those moments, the glow of excitement in their eyes. I've included below 5 budget tips that I follow every year for holiday spending.
1. Create a Budget.
If you don't already follow a budget for your normal spending, I would highly recommend creating one, at least for the holiday season. It's so easy to get out of control with spending, with out necessarily feeling out of control! Stevie and I have followed a budget for years, though it has changed significantly based on our season of life (one or both of us has been a student for 7 out of the 9 years we've been married - school has a way of keeping the budget tight!) We used excel spreadsheets to keep track of our budget for many years, then we transitioned over to Mint.com and used that tool for a while. Last year we took the Dave Ramsey course Financial Peace University and switched our budget over to using an app called You Need a Budget (or YNAB, as we call it). We have continued to hone in on our budget over the past year, identifying our areas of spending and setting reasonable expectations for how we plan to spend. For the holidays in particular, this has been super helpful, because it takes a good bit of foresight to prepare in advanced for the extra expenses!
2. Make a detailed gift list and estimate your spending.
I create a separate holiday budget every year in Google Drive, using the spreadsheets tab. I can go back and look at the previous years and the record of how I spent, what I spent, and where I spent. It's super helpful to look back on the previous year and use that to guide the budget for the new year. Then I write a list of all the people I buy for - immediate family, extended family, friends, neighbors, bosses, teachers - everyone that we plan to give to. I create estimates for all those gifts, and I input the estimates into the spreadsheet. I have a range of what I spend on friend gifts, family gifts, even niece/nephew gifts. This helps build the basis of the budget, and get an idea of exactly how much cash I expect to be working with. I also include miscellaneous holiday-related expenses, and budget for "extras" like hostess gifts and larger grocery bills, Christmas trees (yes, we buy two...), and even Christmas cards. I try to include everything, though I admit, every year I seem to forget something.
Once the estimate has been made, Stevie and I have a finance meeting about the Christmas budget. Yes, we make hot chocolate and pull out our lap tops and compare spreadsheets. We are dorks, but this is the only way to actually get on the same page. This is when we agree on a dollar amount to spend for Christmas. And then we make a blood pact to stick to it. Just kidding. But seriously, we do come to an agreement before I begin the spending spree.
3. Add in a buffer.
This helps when you do the inevitable, and like me, forget to budget for something important! Like stocking stuffers or a party dress. This buffer is always discussed in our budget meeting, and included in the overall budget. I've learned that I always need a buffer, and usually, I need a bigger buffer than I allot for. But nothing is worth blowing the budget over, so I make sure to utilize the buffer only when necessary. Not like, when I see another sale at Williams Sonoma, even after I'm done with all my gift shopping :) The temptation is strong friends.
4. Sync your budget.
Stevie and I are able to sync our budget using both YNAB and our Google Drive, so we can see each others spending. This is super helpful for accountability and just making sure that we are both on the same page with our gift buying. I am the one making most of the purchases, but it's helpful to see what he's spending and where, so that it all gets filed away in our tools. It gets a little tricky when I am actually shopping for him, because I don't want him to see what I'm getting him for Christmas! But I usually create a separate Google doc so that I remember what I got him. And I just keep the totals in our synced spreadsheet. We always agree on what we will spend on each other ahead of time, so the totals aren't a problem if he sees them - I just don't want him to know what Santa is bringing!
5. Shop - and then stop!
Like I said, I am the one who does most of the purchasing in our family. And that's in all areas of our life, not just Christmas. And this year I started Christmas shopping early because I have a baby arriving sometime around this wondrous holiday, so I want everything to be ready ahead of time. I am almost done with my Christmas shopping, with the majority of gifts already wrapped, too. The great thing about shopping early is getting it done - the bad thing is the temptation of holiday promos and hello - Black Friday sales! But if it's not already budgeted for, then I really can't get sucked into the "deals". Nothing is worth blowing the budget over, because that only leads to arguments and marital drama. After doing this thing for almost 10 married years, I can attest to the fact that no sale is worth a Christmas-related blowout with my spouse. Nothing. So once I'm done shopping, I turn a blind eye to the email promos and spend more time baking, wrapping and watching Christmas movies (which includes Pride & Prejudice). It's actually really good to shift the focus off of the buying and devote energy to the traditions of this delicious season.
I hope this helps as some of you are getting prepped for your holiday spending! What tips/resources have helped you and your family with holiday budgeting? I'd love to hear from you in the comments section!