Holiday Budgeting Tips

Planning means our favourite thing, though - budgets! While it might seem like overkill, it will help you from being surprised by how much you spend, and will help you budget the rest of your life around it if you need to. Now, ideally, this is a budget you would've created at the beginning of the year and made it even easier on yourself by saving up some money every month towards your holiday budget. We're not all that well-organised though, so let's just start with a budget.

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Your budget should include:

• Gifts to buy: including work, any exchanges with friends or family, any teachers, plus a few extra (that you'd be happy with keeping in case you aren't able to return them).
• Cards and postage
• Wrapping paper
• Travel
• Decorations
• Catering (or the grocery shop before the party)
• Charitable donations
• School holiday entertainment, care and other costs

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Check it Twice

Now once you've listed out everything that you'll be spending on this holiday season, it's time for the million dollar question - how much are you going to spend? If you've no idea, the best bet is to take a look back at last year and see how much you spent. If you haven't traditionally spent much on gifts over the holidays, but have made a decision to do so this year (or maybe it's your turn to host the holiday party), you've got to be realistic about those costs and make sure they're accounted for in your budget.

Once you land on an overall amount, you'll want to break that money out into each category. For some this could be a good opportunity to use envelope budgeting - that is physically putting the cash you've budgeted in an envelope for that particular expense, and once it's done, so is that budget. It can work well as a physical reminder of how much money you've given yourself to spend, and how you're doing against that total.

From there, you'll want to make a shopping list for everything, gifts and decorations galore! This is where you'll set a range for each individual item and have a few ideas for each within your budget. If you have the chance, take a look at sales when you're doing this bit, as if you want a few people to feel special without blowing your budget it may be the way to go.

If you're not a fan of this kind of holiday research, give yourself breaks, or trick yourself into starting. Tell yourself you'll just spend 15 minutes on it...then another 15, and so it goes. Giving yourself breaks every 60-90 minutes is a good idea, too. Whether that's for a quick stretch, walk around the neighbourhood, a coffee or tea, taking a break helps our brains ability to stay engaged and alert.

Last but not least, you'll want to track spending as you go, so that if you do blow out your budget on gifts, you see it right in front of you and can adjust your overall budget accordingly.

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A few extra tips

There are always a few extra ways you can help stretch your budget, especially around the holidays, both for yourself and your circle of friends and families. For yourself:

• Cash only: We've already mentioned envelope budgeting, but if you don't want to get that detailed, consider going cash-only (or if you buy anything online, using your debit rather than credit card)
• Sales: Two big sales days to keep an eye on are Black Friday and Cyber Monday, which, while more popular in the United States, have made their way to Australia both with local and international retailers. And if you're not seeing someone until later in the season, you can always go for the Boxing Day or New Years sales, too.
• Save early: While it may not be possible this year, try to start saving earlier next year - from January start putting a bit away each month for your holiday savings. Some banks have savings accounts specifically for this purpose.

A few things to consider raising with your family and friends:

• Gift exchanges: Gift exchanges mean that rather than buying your 20 friends 20 gifts, you buy 1 gift. Plus there are a bunch of different games you can play with gift exchanges to make it a bit more fun, especially after a few holiday tipples.
• Group gifts: If there's an expensive gift you know will be perfect for one of your friends or family members, why not ask if others want to go in on it? If you think it's a perfect fit, it's likely they will as well.
• Setting expectations: If you've got a big family or lots of friends, it may be worth chatting to everyone about expectations in terms of how much to spend per person. Spending $50 per person on 20 people is still $1,000!
• Party contributions: Depending on the group of friends or family, if you're hosting, you may want to consider asking for people to chip in a few dollars for food - or even better, make it a potluck.

Make your list, check it twice and feel confident knowing what to expect from your spending this holiday season.