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  • Writer's pictureDebby Raill

Holiday Spending on a Budget

I have been using my 3 step holiday budget planning method for years. Not once have I ever used this system and gone into debt over the holidays. However, I have skipped it, and paid the price come January.

Are you ready? 3 Simple steps to surviving the chaotic holiday spending spree.


When creating a financial plan for the holidays, it’s important to plan for the unexpected. Here are the some of the things I put on my plan.

· List of people I want to buy a gift for

· Events I am attending and what I will need ( a new outfit, hostess gift, cab fare, etc)

· Events I am hosting, and what I will need to purchase (new table linens, new outfit, food, etc)

· Unexpected gifts


This is where I look at my bank account and determine what I can actually spend. Some years that’s $800, other years it’s $200. My budget is going to determine what I can actually manage this year. When creating this budget I look at all the items from my plan and assign

a dollar value to each one.

This is what that looks like:

· List of people I want to buy a gift for (6ppl x $50, 4ppl x $15 = $360)

· Events I am attending and what I will need:

- Christmas eve – gift exchange gift, hostess gift ($30)

- Company party – cab fare, new outfit ($100)

- Events I am hosting, and what I will need to purchase

- Christmas dinner – food, new table cloth - $80

- New Year’s eve – munchies, wine, punch - $60

- Unexpected gifts - $30

My grand total is $660, but my budget is only $500. So, I have to make cuts. I decide what is important to me and get rid of the rest. Can I borrow a dress? Do I have to drink at this party? Do I have to supply all the food for Christmas dinner? Can I spend less on gifts? What other areas can I cut back to make it work?


This is by far the most challenging part of the process. Holding oneself accountable can be pretty uncomfortable. Here are my tricks to make it a little easier.

· Remember that a budget is not the minimum amount you are willing to spend. It is the maximum. If you go under budget, give yourself a pat on the back, and redirect those extra funds to a “holiday slush fund”. This is where your wiggle room comes in for unexpected expenses.

· Shop with cash. Once my budget has been created, I withdraw the cash and place it in envelopes with the name of the person or event on the front. This way I’m always able to see where I am with a quick glance. When my niece was little I used to spend my entire budgeted amount on her. I never redirected those funds. She would get lots of little gifts instead of one big one. By using the envelope method I always knew exactly how much $ I had left to work with. Now that she’s older, she gets one gift and any money left over from the budget goes into my holiday slush fund. As an added bonus, I store the receipts inside those envelopes as well. That way if there is a problem with a gift, I can easily find the receipt.

· Don’t change your mind. You’ve made the decision, now stick to it. You’re going to be in he check out line and see some really great little deals. You’re going to want to “top off” the gift with this way cool little $5 item. Don’t do it. Stick your budget. Make the decision in advance, and just do what you said you were going to do. Don’t even look at the shelves if you can.

Like everything else in life, this takes practice. It takes time and effort to retrain your brain.

Don’t beat yourself up if you fall off.

Do you have any tricks to staying on budget through out the holidays? I would love to hear how you handle the financial mayhem.

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