The holidays can be one of the most expensive times of the year. But with a simple and careful budget, you don’t have to break the bank. Here are some helpful holiday budgeting tips to get you through this season.

Making a Budget

 Just like any other household budget, a holiday spending budget will help you stick to what you can actually afford for gifts for friends and family. Also just like any other household budget, you need to remember to factor in some wiggle room.

First and foremost, establish a spending cap. This should be the amount you can afford outright, without racking up debt on credit cards or dipping into your savings account. Then, make your gift list. Allocate a specific amount to each person on your gift list. It can help to rank your list in order of priority. Yes, we’d all love to give gifts to all our cousins twice removed, but sometimes a DIY gift might suffice.

Be aware of two things when setting your budget: A) don’t set a budget that’s too tight, and B) don’t forget the extras. While setting a tight budget always starts with good intentions, an unrealistic one can do more harm than good. Without wiggle room for last minute purchases or enough cash allocated for your mom’s gift, you can end up frustrated and stressed even before the real shopping begins. And don’t forget wiggle room for costs accrued beyond the gifts. Parties, food, travel expenses, charitable donations, and holiday-themed activities can add up quickly and destroy a budget. If possible, add some money into your budget for these other costs so you’re not left scratching your head when the cash has run dry.

Sticking to It

Your budget is no good if you don’t effectively stick to it. The key to this is to track your spending. There are many apps and fancy website out there, but pen and paper will do just fine. The trick is tracking everything and being honest with yourself. This is why you made room in it for little unexpected extras. For example, you stopped by Starbucks for that bag of Christmas Blend for your sister, but grabbed a skinny peppermint mocha for yourself. Count it, especially if a Starbucks run is not in your normal weekly allowance. It has to come out of somewhere.

Remember, too, that cash is king. It’s all too easy to stretch your budget with credit cards. Instead try the envelope trick, placing your spending limit for each family member or friend in an envelope. When the money’s gone, it’s gone.

Knowing when to stop is a big part of sticking to it. When your list is finished (and you’ve checked it twice), it’s time to stop shopping. Avoid stopping by the mall “just to see what they have.” This can lead to making unplanned purchases and blowing your budget.

If you still have folks on your list after your money budget is gone, consider giving a DIY gift. Traditions and gifts don’t have to be expensive to be memorable. There are many gifts or fun holiday-themed activities that are inexpensive or even free. An experience can make memories that will last a lifetime.

Get a Jump Start on Next Year

Once the holidays are over and you’re packing up your decorations, remember to look back at your budget to make better plans for the new year. How did you do? Did you stay within your budget? Were there places you could have cut back?

This is also the time to start planning a credit card payoff strategy. In a perfect world, you wouldn’t have put anything on your credit card that you couldn’t pay off right away, but we all make mistakes. Now’s the time to make a payment plan that eliminates your balance in the next three or four months. That’s where Preziosi • Nicholson & Associates comes in. We can help you solve even the most complex accounting puzzles and get you back on track to healthier spending. Visit us today to learn how we can help you: