The holiday season is here and that means many things. Happy music, good food, great friends, and fun-filled gathers are certainly on the long list of things that come with this time of year. Unfortunately, though, not all thoughts are happy during this season. While giving a gift to a person you love is undeniably wonderful, paying for it isn’t always so easy. If you are like millions of Americans who are finding it more and more difficult to set aside money during this economic downturn, then this might be a good time to consider budgeting for the upcoming shopping spree.
Step One: What Do You Have to Spend? The first step in budgeting for anything is to look closely at what you can afford. What are you bringing in each month and what is being sent back out the door for bills, utilities, mortgage, loans, etc? Once you have a clear picture of what is left over and what you might already have stocked away, you can move on to step two.
Step Two: How Far Does it Have to Go? The money that you have accounted for will likely have to cover all holiday spending. This is something that many people overlook, and therefore, those people end up spending more than they planned by the time the first of the new year rolls around. Stop to make a list of everything that you will need to buy for the holiday season – wrapping paper, ingredients for dishes to pass, decorations, etc. This list should also include the names of everyone you need to have presents for (don’t forget his side of the family). When your list is complete, move on to step three.
Step Three: Allotting For Each Category With your list in hand, you can begin to break down the money that you have budgeted, dividing it up by categories – food, gifts, accessories – and then within each category. At the end of this step you should know approximately how much you can spend on a gift for each person on the list. Keep in mind that you will generally spend more money of gifts for a spouse than you would on a gift for a friend. Those distinctions really matter and will allow your budget to be stretched more efficiently. Create a chart with the names of each person and the budgeting allowance for the gift. Label a third column as ‘money actually spent’ so you can keep close track of how you are doing during the shopping process.
Do you have a holiday budget or wish that you did? We’d love to hear your solutions for shopping smartly this season!