In January and February, when the credit card bills come rolling in, you may find yourself wondering what you were thinking. It didn’t seem like you were overspending, but somehow a few dollars here and a few dollars there ended up putting a serious dent in your bank account.
With a little savvy planning now, you can have a great holiday season and avoid the first-of-the-year budget blues.
Look at the Big Picture
Holiday spending doesn’t only include gift buying. Make a list of your regular expenses for November and December, such as
- Insurance payments (house, car, health, etc.)
- Credit card payments for summer vacations
- Loan payments (car, home, school, etc.)
- Tax payments
- Rent, food, and other regular budget items
From that list, you should be able to come up with a rough total of your “regular” expenses.
Consider the Holiday Season
Again, it’s not just about presents. Make a list of special expenses for November and December, such as
- Travel (transportation, hotels, dining out)
- Decorations and gift wrapping
- Holiday cards and postage
- Gifts (more on this below)
Get Serious About Gifts
Okay, it IS about the presents, so here are some suggestions for managing that part of the season:
- Start by making a list of recipients
- Be sure to include co-workers, caregivers, household help, and other service providers (mail carrier, newspaper delivery, etc.)
- Consider how and what you will give – purchased gifts, cash, gift certificates, homemade items or food – and put a rough dollar figure on each person’s gift (be sure to include the cost of supplies if you’ll be making gifts)
- Can you set a spending limit on gifts for family or work groups, or do gift exchanges, where everyone draws a name? Can you pool funds with others to buy a family member a more valuable (and valued) gift? Can you turn an inexpensive item (an old garden gnome, for example) into a holiday gift tradition by passing it from person to person each year? Be creative!
Add together your anticipated holiday season expenses, including gifts, and then add that amount to your regular expenses. Compare that total to your income, and you’ll have a good idea of how much you need to save – or how much you need to cut.
The earlier in the year you start this process, the less painful it is, both now and later.
If you have questions about budgeting, your Sente Mortgage loan officer is always happy to help. Give us a call and we’ll see what we can do to make your holiday season even brighter.