After the holiday season, there is a likelihood of you being left with an empty wallet. A study conducted in November 2019 in America showed that the people expected to spend an average of 942 U.S. Dollars on holiday gifts. Another percentage-37% said that they would even spend 1000 U.S. Dollars or more.
Apart from gifts, the holiday season comes with other expenses such as decorations, foods, entertainment, holiday travel, and charitable giving, among others. When all these expenses are added, they amount to thousands of dollars, and you may be left in a bad debt state when the holiday season is over. To avoid these debts, you must come up with a strategy that will make you stick to your holiday budget.
Why should you plan a holiday budget?
- A holiday budget is very crucial since it helps avoid a post-trip headache or regret. By understanding the cost of your adventure, you will enjoy the freedom of knowing you can afford all the expenses on your vacation.
- This budget will save you time. Without a budget, a lot of effort would be required to sort through the many choices of your vacation room.
- With a budget, you will have a sensible search since you will look for places that fall under your budget.
Making a workable holiday budget
When making a holiday budget, you should first decide the amount of money you are willing to spend on this vacation and then work out on how to divide the money on all the things you will require.
Set a Spending Limit
This is the most important thing to consider. Figure out the total amount you wish to spend. This amount should come from the savings you had for this holiday. You should not consider borrowing. You would rather have a challenge allocating this money to all your expensive than end up with bad debts. The first thing is to consider the amount you have set aside for holiday expenses. You might be stashing away a small amount every month in, for example, a Christmas club account in your bank or saving your change in a jar all long in anticipation of the holidays.
List the Expenses
After knowing the amount to spend, figure out what you need to spend it on. You can make a list of all the items you need to buy including but not limited to
- Gifts: List all the individuals who you plan to give presents.
- Food: This includes all the foods and drinks for your family and the holiday parties you will be throwing. Also include holiday treats, if any.
- Clothing: You can use the clothes that you already have, or you can add to your list if you require extra clothing, such as costumes.
- Travel expenses: This is a significant expense that you need to add to your budget. If you will be driving, add the fuel costs. It also includes the costs of tickets and parking.
- Hotel expenses: These are the costs of the lodgings and other services offered apart from food and drinks.
- Holiday activities: These activities include going to church or movies on TV do not charge anything. However, others such as cinemas are payable and hence need a spot in your budget.
- Others: different uncertainties may arise when you are on holiday, and there should be a certain amount set aside for these things.
You should go through your list and sort the items according to how important they are to you. Start the list with the most important expenses. For example, you can decide that giving gifts will be your top priority while buying yourself new holiday clothes is your low priority. This means as you plan your budget, you will allocate a larger amount for your gifts than your clothes.
At this point, you are required to figure out how much money should be allocated to each item. Try and keep realistic figures so as to avoid spending much on a single item. For example, in a case where you have 50 people on your present list, it is not logical to assume that you will buy them presents with only 100 dollars allocated for gifts.
Adjust the Numbers
After adding all the amounts allocated to each item, there is a likelihood that the total money will be more than your budget. Where this is the case, adjust your figures to balance with your budget. Make a cut on the items that are not your priority. For example, you have an over the budget of 150 Dollars and spot a place where you have allocated 250 Dollars for a holiday party with friends. You can scale this to a small indoor party where you can bake a bunch of cookies with a budget of 50 dollars, and hence you can save 200 dollars.
Putting your budget on paper is not final. You need to keep track of your spending so as to ensure you stay within your limits. One of the simplest and old fashioned ways is creating an envelope system. Here, you make a physical envelope for each category, such as decorations and gifts, and put the appropriate sum for each category. You will physically feel how much is left after each purchase.
Tips for a successful budget planning
For you to have a good holiday budget, you need to stick to your plan. You can perform some adjustments so as to save some amount of money.
You can save a fortune on holiday gifts by limiting the expectations of how many presents you will give and their sizes. You can work out a plan to give on a small scale and in a way that satisfies everyone. For example:
- Give cards and cookies: For distant relatives and friends, you can agree to exchange cards instead of holiday presents.
- Have a secret Santa Party: Instead of offering everyone presents, you can put your names in a basket and have each one of you draw one, then you can devote your money to that particular person.
- Give to charity, not each other: Other than spending your money buying gifts for each other; you can direct the money to charity.
If you can drop your gift list, then you can save some money by shopping early, shopping online using saving apps, among others. Shopping early means spreading your holiday shopping throughout the year and not waiting for offers on black Fridays or cyber Monday. Shopping online will help you compare the prices of each item, and you will apply coupons to save a fortune.
Do it Yourself
The goods you need for your holiday should not necessarily be bought. You can make them yourself. These include decorations, holiday greetings, edible gifts, and others. You can decorate your homes with homemade decorations using things such as pinecones or fresh fruits. You can also make a collage of family photos. For holiday greetings, instead of giving out bought greeting cards, you can download free card templates then print while at home.
Free Budget Templates
A budget is important since it shows where you are currently spending, where there is a chance of saving, and where you can be applying for your money. Using a budget template or worksheet can be less intimidating. A budget template can be simple or complicated. There are many budget templates, for instance, business budget template, household budget, and many others. They can also be either monthly budget or annually.
Budgets templates are of great assistance since they have been designed by professional and hence makes it easier to manage your finances. These templates reveal additional areas where you can save costs. They also help you plan for eventualities, and hence you will be more prepared if they happen.
Christmas is a major event that is celebrated annually. This means you can save for a whole year for this event. Spending on Christmas depends on the amount you have been saving on a monthly basis for this event.
You should plan on budgeting between 50-70 Euros per day for western Europe and around 30-50 Euros per day for eastern Europe.
If there is a chance that you can buy a gift for them and you are not aware of the price, then first consider your relationship. Generally, spend around 75-100 U.S. Dollars on them.
In conclusion, all consider the factors that guarantee minimal usage of money while planning for a holiday. This will ensure you are not broke even after the holiday.