Join our newsletter and get our free ebook on how to earn free money.
Save Money

11 Steps on How to Plan a Holiday Budget

11 Steps on How to Plan a Holiday Budget
Tracy Stine Aug 11, 2018
Want to Earn Some Extra Money?

The holidays are already a few short months away and you start wondering how you’re going to do all your shopping when you’re already struggling month to month?

There are several ways to set up your holiday budget today to prepare for the holidays as well as some great holiday savings ideas.

First, let’s start the budgeting process:

1. Prepare a Budget

If you haven’t already, you should add a “Holiday Gifts” category to your budget now. Start figuring out how much you can put into it every week to build up a cash fund for your shopping needs.

Let’s see an example budget:

  • You started with $50 and start putting away $25 a week into a savings account with a 0.6% APR. In 5 months, you’ll have accrued about $550.
  • You started with $100 and start putting away $50 a week, you’ll then accrue about $1,100.

First off, you don’t need an extravagant holiday spending budget at all. In the next segment, I’ll show you ways to save on spending for the holidays as well.

Secondly, don’t forget to reserve some of this money for travel, extra holiday groceries, and other necessities.

2. Prepare to Claim your Cash and Points

Have you been using various apps for cash or point rewards? Plan to cash them in and use the money or gift cards to shop with. Some apps have a time period before your withdrawal request goes through so plan accordingly.

Some rewards may not be significant but any “free” amount helps.

If you haven’t been using any Reward Apps, here are my favorites:

Not only will you start earning cash back on your everyday purchases, you might also get free sign up bonuses and cash for referring your friends as well.

3. Book your Travel Arrangements

Plan ahead and book your travel arrangements early. Do this before they start hiking prices for the holiday rush.

The best time for booking airlines is eight weeks before your planned trip. A trick here is to clear your browser cache before going onto these travel sites – they enable cookies to show if you’ve been there before and secretly raise prices each time you visit.

A booking tip is to be flexible with the dates, adding 2 or 3 days before and after your planned stay may give you a lower price option.

There are lots of money saving tips on travel to read about.

4. Plan to Earn Extra Money Now

For any reason that you may not reach your holiday spending goals in time, its best to start planning to raise some money now.

Some different ways to get extra money are:

  • Have a yard sale – declutter your home and gather things to sell
  • Get a second job – work evenings or weekends
  • Ask for a raise or overtime work
  • Start a side hustle – many can be done in your spare time.
  • Rent out a room, garage space, driveway, or back yard.

You can split your earnings from this extra money between your current debts and the holiday budget. The more debts that get paid off, the money you can dedicate to your holiday savings (and other financial goals).

Now let’s look at how we can save money on holiday spending:

5. Start with a Gift List

Start with a list of all the people you need, or wish, to give gifts to the coming holiday season.

Then separate these people into groups of importance – family, friends, work, and others.

Then either write down gift ideas you have for each person or a set budget amount for each person or group.

6. Trim Down your List

Now that you have everyone you want to give gifts to, start trimming down your list. Here are several options to think of:

  • Eliminate those who are not family.
  • Does the mailman really need a gift?
  • How well do we know our neighbors?
  • Can you give your co-workers something homemade instead?
  • Sometimes we feel the need to give something to our local businesses, your business there is thanks enough so eliminate those.
  • If you set a budget amount for each person or group, add them all up and see if it’s feasible, if not then trim the list some more.

Another possibility for the list is to split the people into categories such as purchased gifts, homemade gifts, and gift cards.

7. Buy Gifts Early

One prevalent way people blow their holiday budget quickly and get into deeper debt is waiting until the last minute to go shopping. They wait until the last two weeks of the holiday season to shop then they can’t find the product, or size and end up buying something more expensive or paying for express shipping

To avoid this, and save money is to start shopping for the holidays now. Take advantage of any summer sales, back to school sales and anything on clearance and such, and store them away for the holiday. Essentially you should be holiday shopping year around.

Here are some other shopping savings ideas:

Use Your App – Shop early through your App for great cash back offers and deals. You then can turn around and redeem your cash on the holidays.

A Family Gift – Buy one gift for a family as a whole, such as your sibling’s whole family. This could be a game the whole family can play. You could supplement this group gift with individual homemade gifts. A great family gift would be an Amazon Echo that the whole family can use and enjoy.

One Person Shops – Having only one person to do all the holiday gift shopping saves your budget in several ways – The person who’s good with money and not an over-spender will save more money and it eliminates “double gifting”, if two or more are shopping you may end up with two gifts for the same person.

 Be a “Secret Santa” instead – If everyone in your family are all adults with families of their own, or there are just too many relatives, maybe instead of a gift for each adult member – be a “Secret Santa”. Buy small gifts, wrap them anonymously, and donate in your relative’s name to a toy drive or charity.

8. Make it Yourself

A great way to save money on holiday shopping is to make the gifts yourself. You can start anytime and hide them away until the holidays. Here are some ideas:

Create something – Are you a crafter, knitter or hobbyist? These gifts are much more sentimental than something from the store.

Give Baked Goods – Bake or create gifts such as candied nuts, desserts, and flavored popcorn. You could even make gift jars with prepared ingredients in them and the recipient just has to add water or milk to create.

Create “Coupon Books” – Create coupon books for things you can do for them such as cooking, cleaning, babysitting, chores, and errands. The receiver then can give you a coupon throughout the new year when they need help.

Create Gift Baskets – Go to the dollar store and gather a bunch of small items such as toiletries, towel sets, snacks, and many other choices and create gift baskets for each person.

Skype instead of Call – Phoning everyone over the holidays can drain your phone budget quickly. Skype them instead – it’s free to video-call anywhere in the world. Skyping also allows distant family members to actually see you and your family which is much more special than a voice call.

9. Start a New Tradition

One way to really save money and get in some family bonding time is to all get together before the holidays (and during the holidays) and do volunteer work.

Start a new family tradition of being a “Secret Santa” as I mentioned earlier for your own family. Other volunteer ideas are:

  • Join a Church’s “Operation Christmas Child” program and have you and your family put together shoebox presents for children in other countries.
  • Create care packages for the military, nursing homes, homeless shelters and other places.
  • Donate your time at a charity of your choice and spend time working together as a family.

Many of the supplies for the shoebox gifts and care packages can be bought at dollar stores such as crayons and coloring books, toiletries, candy, small toys, puzzle books, and more.

This not only creates new memories but teaches your children to be charitable and to help those in need.

10. Gift Cards

Start by buying gift cards. A $20 or $50 gift card a month from Visa, Amazon, Wal-Mart, or your favorite shopping destination, tucked away in an envelope to use at the end of the year goes a long way. That’s about $100 to $250 saved up for your friends in the gift card category on your shopping list.

Additionally, you can get awesome savings by buying used gift cards on Gift Card Granny. You can find discounted cards such as up to 30% off groceries, up to 46% off gas, up to 46% off travel, 57% off restaurants, 45% off clothing and so on.

Lastly, don’t forget the shopping apps I mentioned earlier, start redeeming these gift cards as well.

11. Savings Jar

If you spend with cash every day, start saving your loose change and small bills in a jar on your dresser. In five months, you may get about $80 or more.

If you shop with a debit card, consider getting the Acorns App which will either invest some money for you or round up each purchase to the nearest dollar and put it into a savings account for you.

Not only will you get a $5 bonus, but it’s possible to make $750 in 5 months, (5 transactions in a day and 99¢ saved each transaction).

Now, ideally the holiday savings budget and planning should be initiated at the beginning of the year, but in 5 months with careful budget planning and a watchful eye on your spending, it’s possible to meet all your holiday money goals.

Nevertheless, don’t forget to start this holiday budget planning at the beginning of next year for even more money saved for the holidays in 2019. You can also start your new money resolutions again too.

Tracy Stine

Leave a Reply