6 Steps to Create a Christmas Budget

It was a lovely September afternoon when I took my mom to our local home improvement store to grab some yard equipment. The grass was still lush and green, with many warm days ahead of us. But then we encountered a surprise— all the lawn and garden gear had been tucked away to make room for the Christmas trees! What?

It was a lovely September afternoon when I took my mom to our local home improvement store to grab some yard equipment. The grass was still lush and green, with many warm days ahead of us. But then we encountered a surprise— all the lawn and garden gear had been tucked away to make room for the Christmas trees! What?

I know it’s still November and even still a little early to talk about Christmas, but it’s definitely a great time to start thinking about our gift budget! Setting a budget for Christmas, especially with Black Friday just around the corner, can really help us enjoy the season without any financial stress. Let’s keep the fun going without going overboard and ending up with a big hole in our wallets come January! Consider these 6 steps to create your Christmas budget:

1. Make a list of all your relatives and friends.
The most effective budgets are best created on a clean, fresh sheet of notebook paper using a sharp pencil instead of ink. Start your first budget draft by listing all the family members, friends, and relatives you plan to give gifts to this Christmas season.

2. Put a budget amount next to the person's name.
Remember that not all friends and relatives are equal in our spending. We often allocate more resources to our children and less to distant cousins whom we see only once a year. As you begin this process, it’s acceptable to be a bit optimistic about what you can afford. You can adjust the figures in later steps.

3. Add up all the gifts and determine the total.
As you tally the total cost of all the gifts, you might be surprised by the final amount. However, it's better to be shocked now than when your credit card bill arrives on January 15th. You can adjust the numbers later (remember, we did the budget in pencil), but first, let's examine the income you have available for your Christmas budget.

4. Determine how much extra income you have available.
If you haven't saved money every month for Christmas gifts, don't worry. You can find extra income in two ways: either by working more or by reducing your lifestyle expenses. Both options can be challenging, but the joy of giving a gift to a loved one is worth the effort. Once you've determined how much money you can realistically set aside for Christmas, write that amount at the top of your budget list.

5. Refine the list until the expenses equal the income.
This is the challenging part: determining what you can afford and identifying what changes you may need to make, or even what you might have to decline. Look for creative ways to achieve more with less, and consider using a small gift card, which allows you to better control the value of the gift.

6. Stick to the list!
One of the hardest parts of sticking to a Christmas budget is holding yourself accountable. If you need assistance with accountability, find someone who can support you during this giving season.