If the financial reality of overspending during the 2018 Christmas holiday season is making your 2019 budget feel as tight as your pants after a big meal, now is a great time to establish this year’s holiday budget and start setting aside money to help ease the financial crunch at the end of this year.
Cindy Clampet, Oklahoma State University Cooperative Extension family resource management assistant specialist, said planning and saving now can make the next holiday season less financially stressful.
“When we put off buying gifts, planning special meals, making favorite candies or even sending out Christmas cards, it’s easy to overspend,” Clampet said. “Waiting until the last minute and being rushed can lead to more expensive impulse purchases that you may not have made if you had a plan in place. The holidays can be stressful even with great planning, but putting off things off until the last minute and spending more than you can afford just adds to the stress.”
One easy way to set your budget for the next holiday is to add up what you spent for Christmas last year. Be sure to include gifts, food, holiday parties, special clothing, baking supplies and even stamps if you are inclined to send cards. Were there people you wanted to purchase gifts for but either did not have time or funds? Include that amount on your expense list.
Once it has been established what you spent in each of these categories, add them up. When you have your total, cushion it by about 25 percent. Say your total is $1,000. Adding 25 percent brings it to $1,250. Now, divide by 12 and that will give you the amount you need to set aside each month to cover your expenses next December. In this case, set aside about $105 each month so you can pay cash for everything next season.
“If you realize this amount isn’t doable and will break your monthly budget, step back and look at your list again,” she said. “Think of ways to reduce spending. Perhaps restructure your gift giving by drawing names or buying only for the children in the family. Instead of hosting the entire meal, ask family members to bring a covered dish.”
Also, keep in mind any upcoming expenses that currently are not in your budget. Will you have children going to college? Is a new or used car in your plan this year? Consider all expenses that you are not paying at this time but will be later in the year. These costs may lead to further cutting your holiday budget.
“Keep in mind time and money both are at a premium during the holidays,” Clampet said. “Getting your plan in place now will help ensure an enjoyable holiday next time around.”
Story by Trisha Gedon