How To Build a Holiday Budget That Actually Works

Building a holiday budget sounds like the opposite of a merry good time, but it’s not as bad—or nearly as hard to do—as it sounds.

It’s still (relatively) early in the year for the holiday season, since we’re about a week ahead of Black Friday Cyber Monday, and most of us haven’t even decorated our houses yet, which is a good thing! It means there’s plenty of time to make a plan so you and your money can still be friends in January.

For me, planning the holiday season always starts with a list of gifts I’m planning to give, but that’s only one part of a holiday budget. There’s gifts, and parties, and maybe a new outfit, and extra groceries—eggnog is not cheap, pals.

That’s why last year, I sat down to make a list of my expected holiday spending, and it turned into a detailed spreadsheet to tally up everything I plan on spending this holiday season. AKA, a holiday budget.

So if you, like me, are still trying to get your head around the fact that oh wow, it’s already mid-November, and you need to figure out how you’re going to swing December financially? I have got you covered, fam.

3 Steps to a Holiday Budget That Actually Works

Literally none of this advice is related to cutting out lattes, or giving up the parts of your holiday season that you love the most in the name of saving a few bucks. No, instead, it’s a series of steps that will help you figure out what spending you should be doing, and how to get a realistic picture of your holiday spending in real life.

1. Prioritize Your Holiday Spending

If there are things that you absolutely love about the holidays, prioritize them! Whether it’s travelling to see family (or travelling to avoid family, no judgement) or buying gifts for your loved ones, make sure to account for spending on those things in your plan (aka, your budget).

To help find money to support those priorities, you should also figure out what’s not a priority.

I know no matter how much money I spend, I’ll never be the best dressed person at the office party, or be able to bake like Martha Stewart, so I specifically don’t spend money on new outfits or specialized baking gear during the holidays (even though true confession, I still want to sometimes).

That way, I can afford the $8 eggnog that becomes a weekly indulgence during the holiday season. Don’t judge, it’s divine and worth every penny.

Take some time to really work through what’s most important to you during the holidays, and how much you can afford to spend on those things. Then, because the holidays isn’t actually a solo affair, ask your loved ones—especially immediate family and partners—what makes the holidays great for them.

This can lead to some awesome conversations, and might end up saving you all money if you agree that certain things really aren’t a priority this year.

2. Plan Your Holiday Spending

This is the step that looks most like “traditional budgeting.” It’s where you look at all the different categories of things you think you’ll spend money on this holiday season, from parties to gifts, and you add them all up to figure out how much the season will really cost you.

While it’s easy enough to make a list of all the gifts you need to buy, it’s just as easy to forget the little—and not-so-little—costs that add up over the season.

That’s why I made the Holiday Budget Calculator. It has areas to fill in and estimate how much you think you’ll spend on all of your holiday-related costs, and it tallies up what all of your planned spending will look like. It walks you through everything from what you’re going to spend on an Uber home from the office holiday party, to how much you’re going to spend hosting friends – and if you know what your priorities are, you’ll be able to quickly see if your planned spending lines up with them or not.

It’s how I’m planning my holiday spending, and how I realized that oh shit, the holidays really are going to cost more than I thought they would. And that’s without any travel, since my family is mostly local.

Get your copy of the holiday budget calculator

3. Track Your Holiday Spending

I know, I know, I’m a broken record about the whole tracking your spending thing, but it really is one of the most powerful things you can do for your money.

That’s why, instead of just using that calculator to make a plan for my spending, I’m also going to be updating it with what I end up actually spending on planned things and not-so-planned things this holiday season.

By the end of the month, I’ll be able to see how accurate (or, ahem, inaccurate) my plan was, and I’ll have a great idea of how much I need to plan on spending next year. If it’s way more than my monthly income can support? Then I’ll also know I have to figure out some kind of savings plan to make sure I’m covered for next year.

If you don’t want to track your spending, there is another fool-proof way to stay on track, whether you’re trying to stick to a Black Friday budget or an overall holiday budget. Get a KOHO card.

It’s a prepaid VISA that links to a pretty powerful app to keep track of your spending, but the prepaid part is the real value for the holiday season. Once you’ve mapped out your full budget, load up your KOHO card with that amount of money, and try to only buy your holiday purchases on your KOHO card. Maybe you’ll need to tap your regular card eventually, but nothing keeps you on track quite like a prepaid card, because once the money’s gone… it’s gone.

Get $20 when you start using KOHO

I’ve been using and loving KOHO for over 6 months now, so I’m thrilled to have partnered with them on an awesome deal for you guys. Sign up to start using KOHO, enter the code HALFBANKED when it asks who referred you, and you’ll get $20 added to your account as soon as you make your first purchase on your KOHO card.

Sign up for KOHO now

And really, that’s “all” there is to managing December like a boss when it comes to your holiday spending. Prioritize, plan, and track. Easier said than done, sure, but you’re ahead of the game because you’re thinking about it now.