Most people would agree that Christmas is one of the most wonderful times of the year. And for many of us, it can be quite expensive to fund the holiday season. After all, it costs a lot of money to buy presents for everyone, find the perfect tree, host a great holiday party, and maybe even host or travel to visit loved ones.
If you’re already on a tight budget throughout the year, the holidays can be a very stressful time of year instead of a joyous one. But there are a few simple ways to enjoy a low-stress holiday season. The key is creating a smart Christmas budget well in advance.
Maybe you don’t have a household budget, let alone a holiday budget, but you should. According to Consumer.gov, a budget is "a plan you write down to decide how you will spend your money each month." In other words, if a budget is like a young child that, if left unattended, will go wherever they want without any thought to the consequences. Like a child, your money requires attention and direction.
Here are four simple ways to set up an effective Christmas budget:
If you’ve heard of Dave Ramsey, you’ve probably heard of the envelope system. Ramsey, an American businessman, author, radio host and motivational speaker who advocates for zero-based budgeting, suggests allocating your money for the month into a number of individual envelopes containing cash. These include rent, bills, food, gas, and entertainment.
Why not take this method a step further and create a Christmas envelope? Even if this is the only envelope you use, it will make a big difference if you contribute to it diligently throughout the year. Whenever you have a little extra money at the end of the month, add cash to your Christmas envelope. Even if you can’t start that this year, you can certainly prepare for the next holiday season and lessen the stress of funding next Christmas.
If you just got a promotion, tax return, or a family inheritance, put a portion of it aside into a Christmas fund. If your first impulse is to go shopping or blow it on something you don’t really need, try putting at least a small amount towards your Christmas fund. The more often that you resist the urge to splurge, the less you’ll have to worry about in December. After all, you aren’t going to skip Christmas, so you might as well slowly fund it throughout the year instead of scrambling at the last minute or racking up credit card debt.
In some situations, if you wait until the end of the month to add to your Christmas fund, there's often nothing left to save. It’s a common tendency to spend everything we earn each pay period. The key is resisting that tendency in order to reach long-term goals, like saving for retirement, a down payment on a house or car, or the holiday season.
One way to ensure that your savings stay on track is to automate it. Put your bank’s automatic transfer to work by paying bills directly, such as your credit cards and car payments. From what remains, send a portion via automatic transfer to a dedicated Christmas savings account. If this sounds too difficult, remember that your local bank has friendly professionals who will be more than happy to set it all up for you.
Have you ever bought something in the spur of the moment, only to regret it almost immediately? Perhaps it was a single purchase or a subscription service. Take a careful inventory of everywhere your money goes each month, and eliminate whatever services you are not using. This is an easy way to save money or even get money back.
Depending on how much you tend to spend on the holiday season, you might actually dread December. For example, if you have a family of 10 kids, getting gifts for everyone might be super stressful, or even a huge burden. How do you even begin to get each child one gift, let alone anyone else in your life?
When all else fails, there are title loans. They are good in an emergency and can put fast cash in your pocket to cover just about any kind of expenses that come your way. Even though options like this exist for situations when time is of the essence, with a little discipline, planning, and penny-pinching, you can easily create a holiday budget that makes your Christmas season the best one yet.