“Here comes Santa Claus, here comes Santa Claus”—and there goes the budget. But, it doesn’t have to be that way. With a little advance planning and discipline, you can enjoy a wonderful holiday season without blowing the budget. Here’s how:
Create a holiday budget. Take the time to sit down with your budget and determine how much money you can spend during the holiday season without compromising any other part of your budget—including the money you contribute to your savings and retirement. If you’ve planned in advance, hopefully you’ve socked away a holiday fund. If not, be realistic about what you can spend without borrowing from your future.
Let the budget dictate your spending. Once you’ve determined your holiday spending limit, write that amount on a piece of paper and place it in your wallet. Each time you make a holiday purchase, subtract the amount of the purchase from your budget total to calculate your remaining budget allowance. Keeping a running tally of your spending will help you to stay within your budget.
Use cash only. Credit cards are simply an unhealthy way of borrowing from your future. You’re spending money you haven’t earned yet, not to mention paying exorbitant interest rates. Instead, withdraw real cash from the bank and use that to make your holiday purchases. When we use cash, we get a concrete idea of how much money we are really spending.
Create gift guidelines with friends and family. Set the ground rules before the holidays and stick to them. Some families set a one-gift-per-person limit. Other families choose to give each person one large gift, one small gift, and three stocking stuffers. Some families are so large that they choose to draw names and buy a gift for only one person. It’s personal—figure out what works for your family. Similarly, discuss your gift-giving strategy with friends. It can be overwhelming to shop for a long list of friends. Some groups have made a pact to forego gifts and instead enjoy a girls’ night out together. This prevents needless spending and allows for fun, quality time together during an otherwise harried month
Make a list and check it twice. Make a list of the gifts you plan to buy each person and then stick to the list. This will help you avoid impulse buys during crowded shopping trips.
Do your homework. Spend some time researching items online so you know where to go for the best quality and price.
Give gifts from the heart. It’s easy to get caught up in the consumer-driven rush of the holiday season, but the best gifts are usually those that come from the heart. Give the gift of homemade treats, time, or service to show that you truly care. (For a list of ideas for homemade gifts, see Homemade Holidays.)