How to create a spending plan for the holidays
Yikes! Can you believe it’s already time to start buying holiday gifts? Although some lucky cities still have sunshine and beautiful weather, Thanksgiving is past and Halloween will be done soon. It’s time to start making a list and checking it twice.
A spending plan is like a budget without being so restricting. Rather than stressing out because you spent $20.05 in a category you’ve only budgeted $20 for, a spending plan allows greater flexibility. It’s like a budget for people who hate budgets.
As you get ready for the holidays, here’s how to create a spending plan that works with your budget while still allowing you to spread holiday cheer.
Gifts
As with a budget, you’ll have to tally up your expenses before you begin. For the holidays, expenses might include gifts, food, and decorations.
The easiest way to do this is to take a sheet of paper and divide it into three columns. In column one, write the names of all the people you want to buy a gift for. In column two, write down what you want to buy them for the holidays. This can be as expensive as a new car (look at you richy-rich!) or as inexpensive as a Christmas card.
Take to the internet to research the prices of these gifts. Enter the amount in column three and add it all up to see how much you’ll need to allocate to your spending plan for gift purchases.
Food
Some of you are natural hosts who love the idea of cooking a ham or roast and inviting your closest friends over for a night of fun. Others are content to attend a potluck dinner, bringing nothing more than store-bought potato salad. Whichever person you are, food isn’t free and you’ll have to put it in your spending plan for the holidays.
The easiest way to do this is to make a list of the meals you want to make or food you’ll need to buy and price it out. For non-perishable goods, this list makes it simple to buy things when they’re on sale, rather than waiting until the last minute.
Decorations
The holiday season wouldn’t be complete without decorations. Regardless of your religious affiliation, we can all agree that Christmas lights are beautiful – especially when someone else is paying the power bill.
On a new sheet of paper, jot down the holiday decorations you’d like to purchase this year. For older or more established people, this might be as simple as a new roll of wrapping paper or a new plate for Santa’s cookies. Other people might need to purchase, well, everything. Head online to price it out for the spending plan.
Time to plan
Now that you’ve got a list of purchases and the amount you’ll need to spend, you can look at the income part of your spending plan. How much money can you afford to spend between now and the holidays? Let’s say you can afford to spend $500 this year. If your list of purchases exceeds that amount you have two options:
- Boost your savings or income with part-time work or side hustles.
- Cut your purchases until they’re an amount you can afford.
A holiday spending plan forces you to be mindful of your spending and careful with each dollar. It would be great to have unlimited funds, but a limited amount to spend creates an opportunity to reflect on what’s important in your life.
Spending plans don’t stop you from buying things. Instead, They make you ask yourself, “Is a Christmas 2016 photo frame something I really need?”
This holiday season, don’t stress out about a budget, create a spending plan instead.