When the holiday season approaches, it can be both exciting and overwhelming. As the saying goes, “Tis the season for giving,” but that is also just a festive way of saying that it is the “season for spending.” To make sure you do not end up overwhelmed and overspending, it is crucial that you set a holiday gift-giving budget ahead of time – before you purchase even one gift.
That way, you can head out holiday shopping knowing exactly how much you can spend. A holiday budget can help you feel less stressed and much merrier.
Set Your Overall Gift Budget
To begin, you need to decide what your actual monetary budget is going to be in total for all of the holiday gifts you purchase. To decide on a good total amount, you may want to look at what you spent in previous years and determine whether you want to spend approximately the same amount or increase/decrease it.
This can be determined by assessing your current financial situation – look at how much money you are making and what your normal monthly expenses are to see how much extra cash you have each month, and then plan on spending less than that total for your holiday shopping. Unfortunately, many people do not look at what they can spend before going out and spending, which only leads to lots of debt and stress.
Decide Who You Are Buying Gifts For
Next, what you need to do is write down a list of exactly what people you are going to purchase gifts for this year. Make sure you include everyone that you usually give gifts to so that you do not forget anyone in your budget. In addition to family members and close friends, this may include teachers, neighbors, charity organizations, etc.
You can create this holiday budget by hand in a notebook, pull up a spreadsheet online, or even keep an electronic version stored on your phone. Just make sure that however you create the list and budget, it is stored in a format that is easily accessible when you are doing your shopping.
Related Article: Assessing Expected Cash Flow
Divide the Funds
Once you have decided on your total overall budget and you have decided who you are going to be purchasing gifts for, it is time to allocate specific amounts of money to each person on your list. This is going to be the budget that you set for each person’s gift.
Also, do not forget to budget in the additional costs you are going to incur for purchasing items such as gift bags, wrapping paper, bows, cards and everything else you need before you hand the gift to the recipient. Even just the purchase of a few packs of tissue paper and some gift tags can add up quite a bit. Take an inventory of what gift-wrapping items you already have on hand before deciding on your budget for that because you likely have more items available than you might think, and this can help you from purchasing way too many rolls of wrapping paper on your next shopping trip.
Make a Shopping List
Now you can get started on the fun part – deciding what presents to buy! Look at the budget you have set aside for each person on your list and begin thinking about what gift you would like to purchase for them. Start jotting down ideas if you come up with any that are within your designated price range. This can help you to have a clearer goal when you head to the shopping mall or start purchasing gifts online.
Track Everything You Buy
This is the most important part of creating a budget – sticking to it. Take your budget with you and make sure that you only purchase gifts that cost the same as or less than the amount you decided on. Plus, each time that you buy a gift for someone, make sure that you record exactly how much you spent and who you purchased it for. You can also add in details like what the gift is and where you purchased it if you want to stay extra organized.
A Few Tips
When it comes to saving money on holiday gifts, the most important thing you can do is set a budget. However, there are certain money-saving tips you can follow to make the most of that budget when you are shopping:
- Start shopping early. Although there are some sales that will pop up around Christmastime (like Black Friday, which we can discuss in more detail later), you have a much better chance of finding better deals earlier if you keep tabs on sales and look out for discounted items throughout the year. As soon as you see a good gift for a decent price, snag it. Then you can check that off your list and put it away for the holidays.
- Set aside money early. Just like getting started on your shopping earlier in the year can help you to save money, it is important to start setting aside that money earlier on as well. Set aside a bit of money each month throughout the year, and it will make the spending much more manageable.
- Be smart about Black Friday shopping. Some people love the hustle and bustle of heading out to the stores to fight over discounted TVs at odd hours of the morning. However, others prefer to do their Black Friday shopping online. Regardless of your shopping technique, make sure you review the Black Friday ads beforehand so that you know exactly what you are going to search and/or fight for.
It is important to have your budget set ahead of time so that you can plan accordingly when shopping in the time leading up to the holidays. The budget can keep you from overspending and needing to use credit cards, and it can also help you to decide on what gifts to give based on what you have allotted to spend on each person. Although actually creating the budget may not be a fun process, you will be very glad to have that budget created as soon as you head out to go shopping.
Related Article: Using Rebate to Save Money