Budgeting Through the Holidays

It’s the most wonderful time of the year. But how do you cope with the added expenses of the holiday season? Even if you plan to save money on gift giving this year, you typically still need to account for travel expenses, an increase in grocery spending for when family and friends visit, holiday-time charitable giving, hiring a pet or house sitter to watch your home while you visit loved ones, and more.

These small expenses aren’t the end of the world. In fact, many of them are related to the part of this season we enjoy most – spending time with the people who mean the most to us. But small expenditures can put enough holes in your budget to make going into the new year financially challenging.
Instead of adding this extra stress to your life, choose to set yourself up for success with these easy steps.

#1: Set Aside Cash

Small expenses are going to come up. You may decide to leave a larger-than-normal tip during a holiday dinner out with friends. You may need to pay the babysitter, who watched your little ones during the company Christmas party. Instead of feeling blindsided by these and other little splurges, plan for them. With every paycheck, or every time you visit the grocery store, get a little bit of cash out and set it aside in your wallet. That way you’ll be prepared for those unexpected expenses when they pop up. If you don’t use the cash by the end of the season, you can always put it into savings or your checking account to be used for your regularly budgeted expenses.

#2: List Out Expenses

To make sure you’re not overspending, grab a pen and paper and make a list. Be honest with yourself about how much you’re spending on each line item. Then, decide which expenses you can comfortably cut, and which are non-negotiable. Seeing things written out will help to clarify what’s important – and what’s not.

#3: Don’t Be Afraid to Say No

The holidays are a busy time full of different events, activities, donation opportunities, and more. However, for your sanity and financial well-being, sometimes you have to say no. Limiting your obligations – whether time or money oriented – will help you focus on the events and big-ticket expenses that are more fulfilling for you personally. You’ll enjoy the season more, and your wallet will thank you for spending with intention.

#4: Don’t Go Into Debt

No matter how exciting you think it would be to get your children the latest, greatest toy – or how important you feel it is to fly the whole family out to your house for Christmas – it may not be worth going into debt over. During the holiday season, it’s tempting to start swiping credit cards until they’re maxed out. We justify this by thinking these expenses aren’t really for us – they’re for others. We need to be careful about making too many emotional purchases.

There’s an element of guilt, as well, since we want to express our love for friends and family. It’s important to remember that your loved ones don’t want to see you financially compromised. If you feel like you’re going to go into debt over the holidays this year, it’s time to seriously evaluate why you’re compelled to spend this extra money, and how you can avoid it.

#5: When In Doubt – Remember The Reason For The Season

We should evaluate why we celebrate the holidays. Is it because of the gifts and the lavish dinners? The real reason for the season is to celebrate the birth of Jesus Christ and the freedom that we have in Him. It is not spending money on gifts that people probably don’t need with money we don’t have. This realization can help align your budget focus. During this time of year, we also have the opportunity to celebrate being with those we love and coming together to enjoy one another. Keeping things in perspective often helps you focus your spending on what’s truly important – and stops you from overspending in areas that don’t relate back to the real reason for the season.

This time of year can be absolutely wonderful, and it should stay that way. Remove any financial stressors out of your day-to-day by following these simple budgeting ideas. Whether you implement just one or all five of them, I hope they help guide you seamlessly through the rest of this month and into 2018.

If you feel as though you need help – feel free to reach out to me. I’d love to discuss your holiday budget, how it relates to your bigger financial picture, and how to stay on track. Contact me today to set up a consultation.

From all of us at Kelly Financial Planning, LLC – Merry Christmas and a Happy New Year!