Holiday budgeting is an essential part of your year end personal finances.

Why Do You Need a Holiday Budget?

First of all, why do you need a holiday budget? Well, a holiday budget can help you avoid overspending, debt, and financial regrets. It can also help you prioritize your needs and wants, and allocate your money wisely. A holiday budget can also give you peace of mind and confidence that you can afford the things that matter most to you during this special time of the year. Having a solid plan can help you get over potential financial frustrations post holidays.

How Can You Create a Holiday Budget?

The fundamentals to creating a holiday budget is the same as creating any other budget. Having a separate plan for the holidays can help you avoid any hidden expenses or you having to eat into your main household budget. Here are some steps to follow:

1. Set your overall spending limit.

This is the total amount of money that you can afford to spend on the holidays, without going into debt or dipping into your savings. You can base this on your income, expenses, and savings goals. Be realistic and honest with yourself about what you can comfortably spend.

2. Make a list of all your holiday expenses.

This includes gifts, travel, food, decorations, entertainment, donations, and anything else that you plan to spend money on during the holidays. Don’t forget to include taxes, shipping fees, tips, and other hidden costs. Be as through and realistic as you can to avoid any surprises along the way.

3. Assign a budget for each expense category.

Divide your overall spending limit by the number of categories that you have, and allocate a specific amount for each one. For example, if your spending limit is $1,000 and you have five categories, you can assign $200 for each category. You can also adjust the amounts based on your preferences and priorities. For example, if you value travel more than gifts, you can allocate more money for travel and less for gifts.

4. Track your spending and stick to your budget.

As you shop and spend money on the holidays, keep track of how much you spend and how much you have left in each category. You can use a spreadsheet, an app such as CreditU, or a simple notebook to record your transactions. Try to stay within your budget and avoid impulse purchases or unnecessary expenses. If you go over budget in one category, try to cut back in another category to balance it out.

5. Review your budget and make adjustments as needed.

At the end of the holidays, review your budget and see how well you did. Did you stay within your spending limit? Did you overspend or underspend in any category? How did you feel about your spending decisions? What worked well and what didn’t? Use this information to improve your budgeting skills and plan better for next year.

FAQ: Holiday Budgeting

ACCC has the right financial planning worksheet for your needs!

Household Budgeting Worksheet

A budget is the cornerstone of financial health. Budgets don’t have to be complicated or intimidating. The purpose of a budget is to ensure you are not spending more money than you make every month. It should include all sources of income and all your expenses every month. If you’re spending more money than you’re making, you have two options. You can either find ways to make more money, or you can find areas of your budget to cut spending. You could do a combination of the two as well.

To get started, check out our household budgeting worksheet. This is the financial planning worksheet you should start with if you are just starting out!

Daily Expense Tracker

This worksheet helps you track your daily spending. It’s easy to forget about the little purchases here and there – but very surprising to see the total accumulation at the end of the month. If you stay on track, great! But if you find yourself surprised by your credit card balance, you can use this tracker to see where you might want to cut back. 

Financial Community Guidelines

Housing, transportation, and insurance are substantial expenses to be accounted for. This budgeting worksheet lets you calculate and compare your spending to the financial community guidelines. 

Bill Paying Worksheet

Keeping track of your different bills and their due dates can be tricky, especially if you’re a beginner at managing your finances (i.e. being out on your own after graduating college). Sure, it’s a  learning curve at first, you’ll feel more organized with this bill paying worksheet!  You’ll remember when and what bills are due. 

Other Budgeting Worksheets

Another helpful financial planning worksheet that comes in handy at the start of the school year is our back to school budgeting worksheet. This worksheet can help you track how much you spend on clothes and school supplies for your children.

Our holiday budgeting worksheet can help you stick to your holiday spending budget. This worksheet takes into account all the factors that go into holiday spending, not just gifts. It includes travel expenses, gift wrap/cards, donations, party items, and more to give you a more complete budget.

We also have more worksheets here, including our debt-to-income ratio worksheet and net worth worksheet. You’re not alone if you’ve ever felt overwhelmed by tracking finances, or even just bored. But you can take the mystery out of money management with our resources, and in the end, feel more empowered! 

If you’re struggling to pay off debt, ACCC can help. Sign up for a free credit counseling session with us today!