Stick to a smart holiday spending plan in order to avoid big bills in January. Over the course of the next 6 weeks as we count down to the holidays, I’ll show you simple budgeting and organizational tricks to help this season. Each week I’ll give you some tips on what to buy or do that week to get prepared for the holidays.
Photo by mannequin
Today, I’d like to begin by helping you build your holiday budget. You’ll need to keep track of where your dollars go with an easy and portable system. It’s important to shop wisely. Financial planners suggest a maximum outlay of 1.5% of your annual income on holiday expenses. If you make $40K, that means you have about $600 to work with.
- Step 1: Create a Command Center
Purchase a loose-leaf or spiral notebook with several sections, designate one section for this year (2008) and save the other sections for future years to compare spending. Store your receipts in the notebook pockets. - Step 2: List Your Expenses
Make sure to include everything; gifts for family, friends, co-workers, teachers, stocking stuffers, cards, gift wrap, and postage. You may also want to consider the cost of meals out, a Christmas tree, travel, groceries, clothing, donations, New Year’s eve spending, etc. Use your notebook and designate a page for each expenditure. - Step 3: Set Limits
The easiest way to figure out how much you’ll spend this year, is to look at what you spent last year. If you didn’t keep track, write in ball park figures next to each category. Add up the list to get the total projected cost. Does the number look huge? Begin adjusting down. - Step 4: Track What You Buy
Carry your notebook and write down purchases as you shop. If you happen to find a bargain, you’ll have more money to spend on another category. If you overspend, be prepared to shrink costs elsewhere.
Next, we’ll put your new budget to the test with my six-week plan!
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passivefamilyincome
11.10.08 at 10:50 pm
I think setting limits is the most important thing to keep in mind when shopping for the holidays.
Sefa
02.16.09 at 5:52 am
According to a survey by Spending Pulse, Americans spent eight percent more during the 2007 holidays than the year before. Most of those purchases were made via the power of the plastic card. Visa USA has even announced that credit card holders were able to spend more than thirty billion up till the Christmas week.
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Mortgage Lender Savings
06.28.09 at 4:44 pm
Taking a structured appraoch to finances will always harness the best results, because part of the reason for debt is because we all get lazy and sloppy and don’t think about what we spend. I think that comparing the figures is an excellent point
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