The holiday season is fast approaching. Planning your upcoming expenses is an essential exercise so you can stay on the right financial track. It will also help you relieve the knot in your stomach as you open your credit card statements in January. As they say, “fail to plan, and plan to fail”.
So here are 7 simple tips to stay within budget:
1- Write a list and work it. Besides the usual family members and friends, bear in mind the boss, the co-workers, the kids’ teachers, the mailman, the cleaner, the school bus driver, or whomever you want to thank for being there for you. Once your list is compiled, try to shorten it by making arrangements with close family and friends to only gift the kids or to all contribute to fewer items. For example, parents and grand-parents could buy one large gift to a child, which would end up costing less than four small items.
2- Talk to your spouse. Holiday budgeting is most effective when you have a combined list with your spouse. Check who is on each other’s list and discuss ways to handle the overlap.
3- Decide your total budget. Commit to yourself a total amount that you won’t surpass. It’s important to include sales taxes into that amount. Otherwise, you will easily overspend by 15%.
4- Divide and conquer. Allocate a dollar amount to each person on your list and write down some gift ideas. This is your chance to be creative and offer a service or a handmade gift. For example, you can offer a “gift certificate” to babysit your friends’ kids for one evening. It doesn’t cost you anything (besides your sanity perhaps) and your friend will save money on babysitting fees. If you are into photography or scrapbooking, you can offer something from your own creation. Look into your hobbies and let yourself be inspired.
5- Keep an eye on the details. Do not fail to budget for the bottles of wine, the chocolate boxes, the greeting cards, gift wrapping material, postage/shipping fees and of course the decorations, and new outfits.
6- Shop with cash or debit card. This will eliminate post-holidays financial surprises because it forces you to deal with the expense immediately rather than later.
7- Track your spending. You can download a budgeting spreadsheet right here : https://maxworth.ca/media/holidays-budget.xlsx – Use it as a support tool to keep you on track and to compare your actual spending with the amount you had planned. It will give you a chance to adjust your spending before it’s too late.
Most importantly, make the holidays about the company and the memories, not about the “stuff”.
Happy budgeting season!
This article was originally published in the Chronicle on Nov 13th 2013.