Budgeting For Holidays – Why it’s Important and How to Do It
Holidays are a great time to relax, retract and rejuvenate. These three R’s play a key role in anyone’s life and keep their sanity alive. That’s why the holiday season is considered as the happiest time of the year all over the world.
People leave no stone unturned while planning for the holidays. What they will do, what they will eat, where they will go, what they will buy and most importantly, what they will do to make these holidays different from last year’s. While all this seems pretty straightforward, it’s not all fun and games. Holidays come with a lot of expenses and no matter how strict you are with your money, you end up spending a little more than you would have liked.
Buying gifts, going for dinners, outings, picnics and other things, all require you to spend a good amount of money. If you don’t have a plan to monitor your expenses during the holiday season, you will surely regret it later. That’s why budgeting for holidays is important.
Budgeting for holidays will require you to thoroughly assess your financial standing, including your debts if any, and your future expenses. If you are already going through a tough time financially, you should think about tossing the list of gifts out of your window.
Here are some effective steps that will help you in budgeting for holidays and be sticking to that budget.
1. Make a list of all expenses
First thing you should do is make a list of all your likely expenses in this holiday season. This list will include all the gifts, traveling expenses, wrapping papers, donations, decorations and holiday cards. You can also add the outings you have planned. This is a crucial first step in budgeting for holidays because it gives you an idea of what things you need to cover.
2. Set a spending limit
At this step, you need to determine how much money you can afford to spend on these holidays, especially Christmas. While budgeting for holidays, it’s important that you consider only the amount that you had as “extra savings” or the amount you had already set aside for Christmas.
3. Allocate money to each category of expenses
Once you know how much you have in hand, you can start dividing and assigning that money to different categories. For example, traveling can be counted as separate category and same goes for dining, gifts and decorations, etc.
4. Make a shopping list
The next step in budgeting for holidays includes making a list of your holiday shopping. You must have some ideas in your mind about what gifts you want to give to specific people. The price range of these gifts should strictly not exceed your budget. Look for gift stores that offer sales.
5. Finally, monitor your spending
It’s time for you to shop according to that list and while you are at it, track your spending. You should carry your budget sheet with you, cross off the things as you buy them and makes sure you are not exceeding your budget. This will also help you make adjustments if needed. Also keep an eye on your budget sheet as you go about other expenses throughout the season.
Budgeting for holidays will help you a lot in keeping your finances in control while having the fun that you deserve this holiday season.