Develop Budget for the Coming Holidays

by admin on November 27, 2011

Some people say it is early for their Christmas shopping and then complain that the holidays sneak upon them. As a result of this sneak attack, many Canadians end up overspending. Not only that, but the store window propaganda is about to start, and people are more likely to pile credit card debt.

Rather than maxing out credit cards, experts recommend to develop a seasonal spending plan. Jean Chatzky, a personal finance writer recommends that no more than 1.5 percent of our monthly income goes toward Christmas shopping. This is the dollar amount most people can afford to pay back by February. This is not enough by itself as you need to keep track of your spending. It helps to create a list of holiday gifts in advance and put it on your phone. You may use some gift giving application, for example, Gift Planner, which makes sure you buy what is on your list (the Globe and Mail). Such apps are useful in selecting gift recipients from your Facebook and iPhone contacts and keeping track of where you found the perfect gift.

Even if you have developed the perfect list of holiday gifts (and they fit your budget), gifts are not the only item on your shopping list. There are other Christmas expenses to consider, including decorations, food, and more. You need a solid spending plan for these, and a holiday spending worksheet may be of help. You may divide it into categories – gifts, Christmas decorations, and anything else that will help you budget. It is better to use a pencil so that you can make updates more easily (About.com).

Looking at the categories you’ve created, you will easily see that some items are less expensive than others, but they give a special charm to your Christmas decoration. Candles, for example, are inexpensive, but simplicity can be beautiful, especially if you use your imagination. A pillar candle sits lovely in a bowl of peppermint candies or cranberries. The more creative you are with decorations, the less money you will spend on them, leaving you more to choose gifts for your loved ones.

Gifts do not have to be expensive, however. Think of what your family and friends would love to have and oftentimes, it is nothing fancy. Your sister may have been waiting for a holiday gift to help her clean the stove – but no takers. Whether it is raking leaves for your grandparents or babysitting for your brother, think of what they really want to have. Print out a coupon and give it to them as a present. Finally, do not buy people gifts out of obligation or habit. Send them a nice Christmas card and hope it will arrive before they buy a present for you. Even if it does not arrive on time, they will still have time to return what they bought for you. So, they can reciprocate by sending you a card. It may come as a surprise, but they might feel relieved knowing it is you who took the no-gift initiative.

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