How to create a Christmas budget

Posted on 14 December 2021

Written by Alan Spergel

Christmas is undoubtedly the most wonderful time of the year – but for most of us, it is also the most expensive time of the year. This year, the estimated total each Canadian will spend on gifts is $792. Yet there is nothing worse than January coming around with endless bills to be paid from the festive period. This time of year is even worse for those with unmanageable debt and overdue payments that may have been accrued. Christmas does not need to be expensive, and it can be just as enjoyable on a budget. By having a budget for the holidays, you can be conscious of your spending and work to curb it. Just like Santa, it is a good idea to make a list and check it twice before you reach for your wallet. It can also be a fun challenge to see how creative you can be with activities that can often cost a lot of money. Without further ado, here is how to create a Christmas budget.

Plan ahead as early as you can

The holidays always seem to come round so quickly, but the best weapon you can have in your festive ammunition is preparation. As soon as you can, it is a good idea to begin planning Christmas. It may be a good idea to set up a reminder in your calendar to begin planning the festivities. Planning ahead has a number of different advantages – you will have more time to save, know what you are working towards, and it also allows you to benefit from sales earlier in the year. When you plan, it is a good idea to consider what you will be doing over Christmas and the recipients you need to buy gifts for. If you are really struggling, it is worth speaking to your loved ones and perhaps explaining you will not be doing gifts this year. Ultimately, planning in advance will put you in great stead for when the season finally comes around.

Create a Christmas budget

Wondering how to create a Christmas budget? A good place to start is by creating a budget spreadsheet. Within this, you can input every single cost you foresee having over the holidays. This includes everyone you need to buy gifts for, decorations, parties, and any travel you may need to do over the festive period. Be stringent while you are planning – do you need to go to that holiday party? Do you have to buy gifts for everyone, or can you agree just to buy gifts for the children? Once you have a confirmed list, stick to it. It is then a case of setting a financial amount for each item or person on your Christmas budget depending on how much you can realistically afford. A general recommendation is limiting your total holiday spending to 2-5% of your annual income. It may help to have tiers of importance on your list to help you review the spending required, and where you can cut back. Once you have set a figure, it is so important not to change this or go over it if you want to stick to the limits of your Christmas budget.

Dodge impulse purchases

The more you plan your holiday purchases, the less likely you are to impulse buy. It can be so tempting when you are shopping to add extra items to your shopping cart or upgrade your gifts for loved ones to flashier, more indulgent treats. This is where sticking to your Christmas budget is so important. It may also be that shopping in store brings too many temptations, so perhaps consider making your holiday purchases online. Hang on to your receipts and add any spending to your budget tracker to make sure you are staying within your limits. Be creative with your gifts too – consider how you can make thoughtful gifts yourself, or use coupons in stores wherever you can. Remember what the holidays are truly about too – spending time with your loved ones over spending money you do not have on lavish gifts.

Save, save, and save some more!

The more time you have to prepare for the festive period, the better. It gives you more time to save money, as well as enabling you to take advantage of any sales throughout the year that may be perfect for snapping up early festive gifts or decorations. You may find it easier to put aside cash each month so that you are limited to spending tangible cash for the holidays instead of racking up credit card debt. It is also a good idea to create a calendar to track your savings goals – you can use this to review your progress, and it may also let you know where and when you need to cut back on your spending. Once you have saved before the event, it means that you will not be hit by overwhelming bills in January and you can enjoy the holidays instead. Ways you can cut back to save throughout the year include making your own lunches, using public transport, and opting for cheaper social activities.

Get creative with gift ideas

There are so many ways to spread the love over the holidays, and it does not always need to break the bank. In fact, being creative and thoughtful with gift ideas can often mean more than throwing cash at expensive gifts. Consider gifts you can make yourself, like baked goods, crafts, or personal gifts like a photo album. Make a charity donation in a loved one’s name, or look at gifting an experience like a yoga session or a spa treatment. You could even offer to cook a meal, or carry out chores like babysitting or dog walking instead of a gift. You can also go to the dollar store for cute stocking fillers at next to nothing, and create your own festive hampers in bulk for a personalized gift on a budget. Another helpful hint is to save your reward points throughout the year and cash them in over the holidays to use towards gifts.

Consider ways of gaining secondary income

In order to enjoy the holidays to their true potential, you may want to consider how to bring in some extra cash for gifts and holiday parties. Think about selling any unwanted belongings you may have for cash, or apply for seasonal work. You could also look at turning a skill into a money maker, perhaps through baking, cooking, or craftsmanship. Use social media to spread the word on your skill and see how else you can bring in some extra cash. Equally, using your talents like writing, graphic design, or photography could be suitable for freelancing. You could gain extra income by helping fulfil jobs for other people which will help supplement your holiday spending and take the pressure off. Even activities like babysitting or dog walking are in demand, and could be a simple way for you to gain some quick cash – look for ads in your neighbourhood to see how you can help.

Need more tips on how to create a Christmas budget? At Spergel, our experienced Licensed Insolvency Trustees can help you if you are struggling with overwhelming debt. From credit counselling to support you with budgeting, to filing bankruptcy, we are here for you no matter what your needs. Book a free consultation with us today – you owe it to yourself.

Alan Spergel

Alan Spergel

Alan Spergel is the founder and President of Spergel. A leader in our industry, he is also a former chair of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) and has served on Canada's Superintendent of Bankruptcy Management Board. He actively supports multiple charities, ensuring that Spergel gives back to our communities and has recently been appointed as Chairman of the Board of the Humber River Hospital Foundation. Outside of the boardroom, you can find Alan playing golf, tennis, or skiing and enjoying quality time with his grandchildren.

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