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.
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.
Not gonna lie…I’m judging the eggnog a little bit. But only because I still can’t quite get a taste for it. What’s wrong with me!?
Love the video, love the steps. Such helpful information, Des!
Omg Penny, I am tempted to smuggle some into my luggage to bring to our LAS VEGAS HANGOUT (!!!!) (No you’re excited) just to convince you. I honestly do think it must be because you haven’t tried this specific eggnog, because I used to be on the fence about the whole thing too. But until then, we can agree to disagree 😉
And thank you so so so much friend!
Great post Desirae!
I started saving for Christmas long long ago, stashing $50 away from every pay cheque into my EQ account. I find the that the goal trackers that both my EQ and Tangerine accounts have are really helpful as well. You can stay on track and see your progress along the way.
I have make shift spread sheet with a detailed Christmas list for each person I’m giving gifts to this year, but I never thought to plan out the cost of holiday parties or food for that matter. I’m a Christmas baker so I spend a lot on ingredients and never once thought to budget that out separately. I just buy a few things here and there when we grocery shop the weeks before, but now I know! I should probably keep track of how much that’s taking away from the grocery money!
Thanks so much Devon! And look at you, rocking the advanced step #4 that I felt too bad to include this late in the game – AKA, start saving NOW for next year’s holiday season, lmao. Way to rock at money, for real!
And honestly, I might end up spending as much on food this month as I do on gifts, partially because we’re a light-on-gifts family, and partially because we’re hosting a bunch of friends as their “gift” instead of things or a gift card exchange! Which is why I’m super-cognizant of the need to track it, haha.
Hi Desirae
Good post, I’d say the best way to control your spending is to make sure you create your budget before the event/holiday and be strict with yourself. If you do it half way in you’re likely to have already made a few purchases and maybe get tempted to ignore them for budgeting purposes.
Definitely! Although I find relying on strictness and discipline can sometimes be a hard way to actually change spending habits, especially when they’re as emotional as they get around Christmas! That’s why my third step was tracking – I think awareness is a goal most people can achieve, and it’ll set them up to plan better for it next year. Less willpower required 😉
Holiday Budgets are the best. It is so easy to spend more then you anticipate because as you are shopping, sometimes items jump out you. Its interesting how the 1 scarf I was going to purchase for my sister ended up being two…. I need a scarf too, right?
Since I have been guilty of this far too often, I have change my shopping patterns to purchasing many items online. This works very well if you know exactly what you want to purchase for people. It saves you money too, as you are not travelling multiple times to get to your shopping destination, or spending extra money on lattes to fuel your shopping energy.
This year however, we have decided to do something different. Since we have many children to buy for, we are forgoing the regular spending on a gift of say $50 and buying a little small gift and contributing into each of their education funds. As someone who is still working on paying off her student debt, education funding is very important to me. And lets face it, who really needs more stuff?
Another idea instead contributing to education, you could assist in paying for lessons, like swimming or soccer.. or even activities that you can do with the people you are buying for.
Good luck this Holiday Season.