top of page

Holiday Budgeting Starts Now: 5 Ways to Prep for Christmas

Holidays have a way of sneaking up on us, don’t they? It’s easy to put off budgeting until the last minute, causing stress and overspending. With just a few easy steps, you can start planning and prepping now so you can relax in December.

Let’s look at the five questions to answer as you plan for Christmas gift-giving.

How Much?

Think about what kind of budget you have to spend for Christmas. Then, put a number to it. Is it $500, $5,000, or something in between?

When deciding on a holiday spending plan, keep in mind the following:

Be realistic. Get real with yourself about how much you can spend on gift giving, decorating, and holiday activities. A recent figure shows that 36% of U.S. adults added to their debt load last year because of holiday spending. Set a realistic budget that is within your means.

Be creative. If money is tight, consider how you can reach your goal by either paring back in other areas or earning extra money between now and December.

Be resourceful. Hunt down your unused gift cards, store credits, cash back or reward points, and other unredeemed certificates you may have lying around. A recent poll revealed that 51% of U.S. adults have unused gift cards (that’s $15.3 billion!). We all seem to have them tucked in our wallets and sock drawers.

For Whom?

Depending on the size, how close-knit, and the income level of your family and extended family, the list of who you buy presents for and spend time with may vary. Many families employ some type of gift-giving system so that everyone isn’t buying something for every single family member. This may involve each person drawing a name, a family buying for another family, or purchasing gifts for kids only.

In addition to immediate and extended family, other people on your Christmas gift list may include

● close friends

● neighbors

● coworkers

● employees

● teachers

● coaches

It isn’t necessary to gift everyone in your sphere of influence and you certainly should not feel obligated to do so. Think about who you see often and know well enough to give a little something that they will appreciate. Don’t feel bad about crossing people off the list if finances just don’t allow for a gift this year.

What to Buy?

We all want to reward and bless our loved ones with gifts and special items. But, more doesn’t necessarily mean better. A fewer number of well-thought-out presents can have more impact than a glut of meaningless ones.

One helpful rule of thumb in buying gifts for family members is the “Four Gift Rule.” This strategy boils down to this: Everyone gets four gifts. The categories of those four presents are:

Something they want. This might be that special skateboard your son wants, the concert tickets your daughter has hinted at, or a special dinner date with your spouse.

Something they need. Essentials like backpacks, sports gear, or an auto club membership are things they will appreciate but not purchase for themselves.

Something to wear. The latest sneakers (especially for any teen), shoes, clothes, and jewelry all fall into this category.

Something to read. It could be comic books, the newest bestseller, or a magazine subscription.

The Four Gift Rule allows families, especially kids, to know they will be getting a variety of things and not a mountain of indulgent items. This also sets reasonable expectations and provides an example to kids of budgeting and planning.

What Are the Deals?

Retailers are smart. They start marketing and sales for the holidays in early fall. You can use this to your advantage by being strategic about shopping the sales.

While the thought of Christmas shopping year-round can sound exhausting, there are people who use this technique to find gifts during end-of-season clearances and closeouts. But there are always deals to be found.

Keep on the lookout for seasonal holiday pricing, retailer anniversary sales, and free shipping promotions at your favorite stores. Many apps offer coupon codes and even cash back on your purchases. It pays to do a quick search online and see what is available.

How About Experiences?

Consider giving an experiential gift rather than material things. Doing something together with your family builds memories and shared experiences. The impact of this can last far longer than any material gift that you give.

Some ideas for experiences include:

● Many people have more than they need, are surrounded by so much stuff, and don’t want anything else. Older adults especially would love to have the gift of time with you on an afternoon outing rather than another digital picture frame for their bookshelf.

● For younger kids, a special visit to the zoo will add to their memory bank.

● Some families forego gifts and instead take a trip together. While this can be at a cost that is equal to or more than simple gift giving, a trip includes shared time and family connections that individual presents do not provide. It also avoids the accumulation of more stuff.

● For friends or coworkers, spending time together while volunteering at a local animal shelter or food bank can be a way to share experiences while helping the community.

Final Thoughts

The holidays can be a time of out-of-control spending and blown budgets, but it doesn’t have to be that way. Thinking about things like your financial situation, family expectations, and what you want to achieve this Christmas season will help you plan. By setting up a strategy and putting a plan into place now, you can enjoy the season and all the joy it has to offer.

Written by Matthew Delaney


bottom of page