Have You Set Your Holiday Budget Yet?

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shutterstock_117998953It can happen to the best of us: You’ve just had an amazing summer, you’re enjoying the fabulous fall weather and then, bam—the holiday season is knocking on your door. In some years, it can seem as if you barely have enough time to recover from the Halloween sugar high before it’s time to get your turkey in the oven for Thanksgiving. If you’ve found yourself in this position before, take comfort in knowing that there is still plenty of time for you to avoid the last-minute scramble that so many of us experience each year.

With the holidays just around the corner, now is a great time to make sure your holiday budget is prepared. After all, in order to stay organized, sane and confident during a frenzied time of year, setting your budget should be the first order of business before you launch into shopping, wrapping, and baking mode.

Create Your Lists and Check Them Twice

Before any dollar amounts are discussed, create a set of lists to outline your holiday priorities. What starts as a simple list of each holiday your family celebrates will eventually turn into a detailed list of the specific items you’ll need to buy for each meal and which gifts will be purchased for each person.

Be thorough in your list-making by including who you’ll give gifts to, any potential travel, hosting requirements, grocery lists, any necessary home improvements, décor, and miscellaneous expenses that will inevitably creep in such as postage and increased electric bills if you’ll be turning on any decorative lights. Also, don’t forget about year-end charitable giving donations as those will also impact your budget.

Weed Out the Unnecessary

Once you have your lists in place, it’s time to be ruthless with cutting superfluous expenses. Be honest with yourself about the areas where you tend to spend more as well as where you can cut back a bit. Some examples could be trimming your gift recipient list, swapping a cheaper recipe into the mix, forgoing expensive outings, etc.

After you’ve trimmed the lists, it’s time to assign dollar amounts to each category. Whether you choose a straight dollar amount or a percentage, be realistic with your spending goals and include a bit of a buffer whenever possible.

Count Your Pennies

Or better yet, track them. Remember that a budget is a fluid entity, so be diligent in your efforts to track where your money is going. Not only will you be able to identify potential overages before they happen, but you’ll also have this information as a reference point for setting next year’s budget.

A bit of planning and organized action now will lead to less stressful, debt-free holidays in the future!

How do you budget for holiday expenses?

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Jen is the owner of The Happy Homeowner, where she writes about living a healthy, balanced life one cent at a time. Previously, she paid off $14K in credit card debt in less than a year and hasn’t looked back since. Follow along on Twitter with her financial, fitness and travel adventures @bthhomeowner!