Creating A Holiday Shopping Budget

Shopping for Christmas gifts for friends and family can quickly become expensive if you don’t pre-plan your shopping strategy. Before you begin shopping for Christmas, set some guidelines. Make the most of your money by creating a budget for your holiday shopping needs.

Creating a Budget: Set Limits

The first step in creating a budget for holiday shopping is deciding where your money will go. Make a list of gift recipients and holiday costs. Include all holiday-related expenses, such as:

  • Gifts for friends and family
  • Gratuities for hairdressers, babysitters and other service providers
  • Money for holiday parties.

Next, decide how much money you want to spend on each recipient, and how much should be earmarked for other holiday expenses. If you want to keep your budget down while shopping for Christmas, consider setting spending limits with your friends and family. For example, you can set a $50 limit with your siblings or friends. A budget worksheet can organize the amounts delegated to each item in your budget. This will help you to decide how much you can afford to spend in each category and on each person.

Creating a budget ahead of time allows you to distribute money earmarked for holiday shopping without going over your limit. For example, you may want to spend $100 on each sibling and two of your best friends, but you realize you have a number of smaller gifts and gratuities to add to your budget. Creating a budget before you begin your shopping will allow you to adjust your allotments before you spend more than you can afford.

Budget Help: Shop with Cash

Just as important as creating a budget is sticking to that budget. Shopping for Christmas gifts with cash can help you stay within your established budget. Even if you keep track of your credit or debit card purchases, it can be easy to lose track of your spending when you shop with credit or debit cards.

Another tip for budget help is to place the money allotted to each recipient in a separate envelope. When the envelope is empty, your shopping for that person is complete. This way, you don’t spend more than you planned on any one person. To ensure you remember all the presents that you have purchased, keep a list of items purchased and money spent for each recipient, or bring along a copy of your budget worksheet when you go shopping.

Save Throughout the Year

Paying for holiday costs can be daunting if you don’t have money put aside to pay for gifts and other expenses. Saving money throughout the year makes shopping for Christmas easier to fit into your budget than drawing all your holiday spending money from one or two paychecks. For example, if you receive a biweekly paycheck, and you put aside $30 each pay period beginning in January, you will have saved nearly $700 by December. If the money you have saved does not pay for all your holiday expenses, it will, at the very least, offset the costs.