Paycheck Chronicles

Don't Blow Your Christmas Budget Now

These last few weeks before Christmas are the time where most people start overspending, and the place where most people blow their Christmas budget is with presents. Either the person has been very careful up until now, and they get a little carried away, or they haven’t prepared at all and start panicking. I’m usually in the first group, but this year I’m in the second group. No matter which side you’re on, here are some strategies for keeping your gift spending in line.

Remember Your Reasons

Think ahead to next year: what are you hoping to accomplish financially? The spending decisions that you make during the next few weeks will impact your ability to meet your financial goals in 2016. What’s big on your horizon? A PCS move, a new baby, a kid starting college, a car needing replacement? These are all great reasons to stick to your holiday budget. You don’t want to start 2016 with bills that you don’t need to have.

Our family is moving into a new house next year, and I know there will be all sorts of unexpected costs with that move. It is a lot easier to remember that my kids don’t need any more stuff now when I think about how many things we will need then.

Check Your List

Hopefully, you have a holiday spending plan. Keeping an eye on what you’ve already bought and spent is a key way to refrain from overspending. If you don’t have a list yet, take ten minutes to make one now. Just write the name of everyone for which you need to buy, how much you plan to spend, what you’ve already bought, and what you still need to buy. If this takes you more than ten minutes, you need to consider if you are buying gifts for too many people, or if you are buying too many gifts per person. Seriously.

Even with a list and a Christmas budget, I still somehow end up buying “just a few more little things” every year. And then, when Christmas morning rolls around, I realize that those extras were absolutely, completely unnecessary.

Look At Last Year

If you have photos of your last Christmas, you may find it helpful to look back at how much stuff was given and received. Obviously, this strategy doesn’t work if last year was lean or otherwise unusual, but most people look at their Christmas photos and are amazed at how many presents were under the tree.

This is even more true if you have a generous extended family. I always feel that I’ve bought an appropriate amount of presents, but then when grandparents and aunts and uncles all show up with their boxes, it is overwhelming.

There’s nothing wrong with gift-giving, or even want to be generous or splurge-y. On the other hand, getting caught up in the fun of present shopping can do long-term damage to your budget. Focusing on the big picture can help keep the season fun and frugal.

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