If you stress every year over how to pay for all your holiday gifts only to suffer remorse come the first credit card bill of the new year, you are not alone. In fact you are in the company of over 70% of the population according to multiple research and consumer studies. You want this year to be different. You want this year to finally be the year that there is no post-holiday financial stress. That’s what these 31 posts are all about. You can save money, stick with a budget, and have a joyful holiday with these tips. If you don’t already have a written holiday gift budget, stop what you’re doing right now. Don’t buy or make a(nother) gift until you get a written holiday gift budget into place.
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Pick Your Number
The first place you always want to start when making any budget is with the total amount you have to spend. Think realistically about what you can actually afford to spend. This is the time to be brutally honest with yourself and not sugar coat your situation. No one else has to know your financial situation but you definitely do. When determining your budget, keep these tips in mind.
- Don’t think about who you have to buy for.
- Don’t think about that $60 Xbox game your child wants.
- Do think about your existing debt.
- Also think about all of the other financial obligations you have coming up during the holiday season such as food, travel, and sporting tournaments.
- Do think of how miserable you felt after overspending in previous years.
Make Your List
Once you have your total number for your budget, set it aside and forget about it for a second. Start making a list of everyone you need to buy gifts for. Make your first draft quickly and include everyone that comes to mind. Only after you have made this list should you look back at your budget and compare the two. Take a hard and critical look at both. If you have a $50 gift budget but also 50 people on your list then you need to make some serious cuts.
No matter who is on your list you can make cuts.
Later in the series we will talk about alternatives to traditional gifts and gift exchanges but, for now, here are some tips you can use to cut your current list.
- Combine couples and/or families and give them one gift.
- Cut out coworkers. If they are close enough to truly warrant a gift, they will understand that it is just not in the budget this year. If they don’t understand, clearly they don’t deserve your time, energy, and money anyway.
- Resolve to send a thoughtful card to your child’s teachers instead of actual gifts.
- Cut anyone that you don’t communicate with on a regular basis that isn’t family.
Allocate Your Funds
Gift Budget Example
Once you have cut down your list, it is time to start allocating your funds. You can’t just set up a general total budget number for the group and expect to stay on budget. Each person needs to have a specific dollar amount assigned to them. As you make purchases for that person, subtract the amount spent from their totally allocated amount. (31 Days Subscribers get a free printable planning page for this along with instructions to assist with this step **Update** All freebies from this 31 Days List have been moved to the VIP Library for subscribers. Sign up for free here!). Here is the general guideline to follow when breaking down the total amount of your written holiday gift budget:
- Immediate Family: 40-50%
- Extended Family (Grandparents, Brothers, Sisters…): 20-30%
- Close Friends: 10-20%
- Everyone Else: 5-10%
Our Gift Budget 2015
Again, these are just a starting point for you. You will inevitably need to allocate funds to fit your list. Our percentages do not fall precisely within these parameters but we do stick pretty close. We have a total budget of $500 broken down as follows:
- Immediate Family (including stockings): $235 or 47%
- Extended Family: $140 or 28%
- Close Friends: $110 or 22%
- Everyone Else: $15 or 3% (we only have 2 that fall in this category)
As you can see, we don’t fall exactly within the guidelines set above, but we also aren’t too far off. Our “everyone else” category only needs to accommodate two people so that gives us slightly more freedom in other categories. The same goes for you. If you have a ton of very close friends but not much extended family, consider switching those two guidelines to accommodate your family.
Alright! Give yourself a pat on the back because you have the key piece of your holiday savings foundation. Your written holiday gift budget truly is the cornerstone of the entire process. You now know exactly how much you have to spend and exactly who you’re spending it on. That’s half of the battle right there! Come back tomorrow and we’ll tackle what you 3 main options are for actually obtaining the gifts you need. Also, don’t forget to sign-up for the 31 Days of Saving on Holiday Gifts newsletter to receive access to extras like the Gift Budget Planner mentioned above! **Update** All freebies from this 31 Days List have been moved to the VIP Library for subscribers. Sign up for free here!
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