The Holidays Are Coming

Hard to believe, but just a little over three months until Christmas.  It’s even less until the start of Hanukkah, just over two months!  If you haven’t already started preparing your brain and your budget for holiday expenses, you may find that you have a little less spirit than you’d like.  Fortunately, it’s not too late!

As a side note, please remember that the end-of-December pay period is going to be L-O-N-G, from 13 December to 31 December 2013.  This is probably going to be a factor in most people’s plans.

What Do You Want To Spend?

Most of us forget about many common expenses that occur during the holidays.  The list of things that you can spend money on is overwhelming.  Some things that immediately come to mind include:

  • baking ingredients
  • holiday cards and postage
  • extra offerings at religious services
  • special outfits
  • tape, gift wrap and ribbon
  • Christmas tree and decorations
  • photographs
  • teacher gifts
  • taxis, if you are drinking alcohol while you are celebrating
  • other household decorations
  • tickets to entertainment, such as The Nutcracker
  • family photos
  • dry cleaning for special clothes
  • hostess gifts
  • babysitting
  • gifts for friends
  • charitable donations, including purchases such as Angel Tree presents
  • turkey, ham, roast beef , or other more expensive ingredients for the main meals
  • extra electricity for those lights
  • haircuts, manicures, and other salon treatments
  • family gifts
  • plane tickets, gas, hotels and/or rental cars for travel
  • postage for packages
  • tips for people who provide you with service throughout the year
  • food and drink for entertaining
  • pet boarding or care, if you travel

Once you’ve compiled your list, it is time to put dollar amounts next to each item.  Be prepared for a bit of a shock.  I still remember the year I figured out how much we spent on teacher and staff gifts for my four children.  Whoo-eeee.  Only by putting numbers next to items can you figure out how much money you’ll need to meet your holiday spending.

How Are You Going To Pay For That?

First, you might have to realize that you can’t afford everything you’ve got planned.  If this is the case, a little juggling might help.  What if you could cut 10% off of each category, or a little more off a few categories.  What if you skipped new clothes, new decorations, and swapped babysitting with a friend.  With a little creativity, you can probably cut the budget a bit.  Gifts are a category where there is almost always room for frugality.  The internet is full of ways to spend less on holiday gifts.  Don’t forget to use resources like Ebates or My Points to get rebates on purchases that you are already going to make.

Then, look at your income.  You’ve got seven more military paydays before Christmas.  How much can you take out of each paycheck to spend towards holiday expenses?

If you are still a little short of meeting your budgeted expenses, how could you earn extra month?  Could you take a part-time job for a few months?  Do you have a ton of books that you could sell on Half.com?  Is this the right time to clean out those closets and take outgrown or unloved clothing to a consignment shop?

Another tactic is to decrease your regular expenses for a few months.  Perhaps your grocery store coupon usage has become victim of a time-crunch.  I always save at least 10% when I am diligent about using coupons.  This would be a great time to start again.  Maybe you could drop an expensive bad habit, like drinking soda.  This would save money and be good for you!  Inventory your pantry and freezer, and create meals around the ingredients you find there.

Last, but certainly not least, check your income tax withholding.  By now, you can probably estimate your total income for the year.  Have you already had enough taken out for income taxes?  You could change your withholding to provide more take-home pay for the rest of the year.  Be sure to change it back when 2014 begins…that would be a bad surprise.

Keep Track As You Go

Once you’ve got all these plans, keep track of your progress as the season progresses.  I have a binder that I reuse every year.  It has my budget, greeting card list, favorite recipes, and lists of presents from years past.  I have a pocket for receipts so that I can return things easily.  If you are keeping track of your budget, you will be able to make adjustments as you go.  Let’s say that you find a fantastic deal on gift wrap supplies.  You could choose to save that money, or increase the amount for another category.

By taking these steps, you should be able to slide into January with an intact bank account and no extra debt.  That’s a great way to welcome in the New Year!

I write nearly the same post every year.  You might find something different in last year’s post:  The Holiday Budget.

 

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.