But you also don’t want to be paying off your Christmas in February, because bringing holiday debt into the new year… well, it just sucks.
A holiday budget is a great place to start, but even if you have that, there are sneaky ways that the holidays can wreak havoc on your budget so it’s important to remain aware and vigilant as you check off your list.
1. You don’t know how much you actually spend
If this is the first year you have decided to track your holiday spending and try to stick to a budget, you are missing a huge piece of the puzzle if you don’t know how much you usually spend on the holidays. You need to know if your new budget is manageable, or going to be really tight. If you track your spending, you should be able to go into your budgeting software and figure out how much money you spent on Christmas last year. If you don’t have that, you can still figure out how much you spent last year by opening up your bank statements from December of last year and comparing it to a more normal month, like October. The difference should be a good starting point of how much you normally spend during the holiday season.
2. You’re only thinking about gifts
I don’t know about you but my holiday cards, Christmas tree, wreath, wrapping paper and food for Christmas dinner really add up. Make sure you are including these other big ticket items in your holiday budget, otherwise you might find yourself really short on funds for all the other holiday extras.
3. You don’t have a system to keep track of what you bought
You don’t need a full flown budget to keep track of your holiday spending. For a specialized season, it’s actually easier to have a separate excel spreadsheet (or just pen to paper!) to keep track of who/what I’m buying, what I have left and if I’m on track. This really helps me with certain categories, like kids, where it’s easy to go over budget!
4. You don’t include shipping and tax
Ohhh this one is so me!! We do gift exchanges with our extended family and I want to spend every penny of the limit on the actual gift (not shipping and tax) so I can get the nicest gift possible. But, if you are shopping online, and do this over and over, you really haven’t budgeted properly and those extra expenses will really add up and kill your holiday budget.
5. You let the add-ons add up
Stocking stuffers, another appetizer, the extra bottle of wine. These things really do add up and you should be keeping track of them as part of your holiday budget. It’s normal to want to add on to a gift or bring an extra dish. And individually, it might not be a big deal. But if it’s your habit to do it again and again, it will add up and have an impact on your bank account.
Trust me when I say, if you pay attention to these sneaky dollar stealers you will see a big shift in your holiday spending. I want you to have the best holiday possible and spend as much money as you can afford, but I don’t want you to overdo it.
So, figure out what you normally spend on the holidays and if that is doable this year. Make a list of holiday expenses that goes beyond gifts. Create a system to track what you spend. Include the true cost of the gift. And watch the add-ons. It is the secret sauce to a holiday you can enjoy AND afford.