Here’s a truth often unspoken: Christmas can be the most wonderful, but also the most expensive time of the year. And, the older you get, the more people you know. This often means more gifts to buy, and more holiday parties to go to. As Andrew Rombach, a writer for Millennial Wealth says, “Christmas has evolved over the years from a simple celebration to a blow-out, complete with long wish lists, fancy parties and far too many occasions that call for gift-giving and other expenses.”

And so, every year you get older, the more money you potentially end up spending.

But what about if you’re saving up for something special, say, your wedding, travel, or an expensive purchase? As much as you want to get into the Christmas spirit, as they say, you also don’t want to sabotage your financial goals, right? And so the answer is this: to be money-savvy at Christmas, create your own holiday budget.

The New Savvy - Finance - Holiday Budget 2

Planning your holiday budget

Ideally, planning your holiday budget is best before the last quarter of the year starts—around September would be good. Yet here we are in the first week of December and you may not have yours yet, that’s all right. No need to panic. Jump right in and—as the Nike slogan famously goes—just do it.

All right, first things first. Let’s list down everything that you spend on during the holidays, shall we?

  • Christmas decorations for your home
  • Gifts for the family
  • Gifts for friends and workmates
  • Wrapping paper and gift bags
  • Food (holiday meals)
  • Food you are giving as gifts
  • Greeting cards and postage
  • Clothes for yourself
  • Travel expenses if you are going on holiday (airfare, accommodations, meals and other expenses)
  • Donations to charity

You may have some other items for this list, such as an annual holiday photo (like the Kardashians). Make sure you add those in.

All right, once you have that list, the next step is deciding on the total amount you want to spend. You’ll have to look at your bank account and the amount of savings you have, your year-end bonus. Also check on where you are in relation to your financial goals. This should give you an idea of what your budget is.

Make sure you’re being realistic. Trust me, the last thing you want to do is get into debt because of all the holiday expenses. All these things do add up, and all the more you want to be clear-eyed.

Determine what takes priority

One of the things that will help you plan this budget is to prioritize. What’s most important to you is what you will spend on. If it’s buying something really nice for your parents or partner, then other things will naturally take a back seat. Maybe this year you’ll go without a new dress for the office holiday party.

When you have the total budget in mind, that’s when you can allocate a budget for individual gifts and the other items on the list.

Pro-tip: Before using credit cards for your holiday shopping, check out our pointers in this article: Which Type of Credit Cards Should You Use for Holiday Shopping in Singapore? to help you determine which one is the best.

Fast forward to next year—make your own holiday account

As I said earlier, if you were unable to create your holiday budget this year, that’s all right. The important thing is that we get smarter along this journey called life, right?

For 2019, and even onwards, what you can do is open a separate account just for the holidays. Start as early as January. Consider the total amount for your holiday budget for this year, top it off with by 5 to 10 percent, and then divide that amount by 9. That’s how much you need to save monthly. By the time the last quarter of the year rolls around, you’re set. You’re ready to go Christmas shopping as early as October, thereby beating the holiday rush.

Some women do better with weekly savings. This is fine, too. Divide your total holiday budget by 36—the number of weeks from January to the end of September.  Put aside that amount weekly and voila! You’re all set for the season, two months ahead of time.

If you’re thinking of going on holiday this year, it’s not too late, either. Check out our article Alternative Holiday Plans: Rethink Your Travel Plans for a good read on other options for the holidays.

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But what if I’m short my on holiday budget right now?

So it’s the first week of December and you find that you don’t have enough for your holiday budget. I can read your mind, ‘What can I do right now to add to my holiday budget?’

Here are some suggestions:

  1. Give something up—something like your daily trip to your favorite coffee shop. That Frappuccino that sets you back a few dollars can be replaced by a stainless steel mug from your percolator at home. In the same way, bring a sandwich from home instead of going out for lunch. No movies! Everything counts, and everything adds up.
  2. Try a financial fast. No, not food, but everything else that’s an extra in your life. Try this for a week. After you do your grocery shopping and you buy everything that you need—do not spend anything at all except for transportation. And I mean the bus or train, not Grab or Ryde.
  3. Gather all your loose change—if you are anything like me, you have loose change everywhere. Don’t ask me why but I have several coin banks scattered all over my room, plus loose change on my dresser, the kitchen counter and beside the washing machine. (That last one makes sense, right?) Put all your loose change together. My boyfriend spent a whole morning doing this and he found, to his great surprise, that he had collected almost $500 dollars. True story.
  4. See what you can do on the side—babysitting, house sitting, pet sitting or walking. Maybe some friends need their homes cleaned just before the holidays. Maybe your nephews and nieces need extra tutorials. Now is not the time to be high and mighty, all work is honorable.

One final tip on holiday budgeting

If 2018 is teaching you a lesson, that lesson would probably one on proper planning, wouldn’t you agree? Yes, I agree that it’s late in the year, but thankfully there are a few things you can still do in order to save up some money for your holiday budget.

No matter how convenient using our credit cards is, in order to prevent overspending, using cash is always better.  If you’ve already set a budget for the holiday season, having it in cash makes it easier to control.

Jacqueline Curtis from Money Crashers says, “Commit to ditching credit card spending entirely and instead use cash only during the holidays. If you don’t have it, don’t spend it. I discovered that with this approach, planning is everything – and if you plan early, you’ll have a comfortable nest egg built up by the time you start making a list and checking it twice.”

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Anna Maria Romero is the Deputy Director of Lifeline Foundation by day and a freelance writer by night. Lifeline Foundation’s advocacy includes empowerment through financial literacy, which is why she has written and taught on this subject on numerous occasions. An educator by profession and training, Anna Maria graduated from the University of the Philippines, cum laude, and taught for more than two decades, having opened a school in 1995. She stepped down as as principal of South City Central School in 2015 in order to pursue a career in the non-profit sector. She is a contributing writer to an online news site, and has been on the creative team of “This Journal Will Actually Change Someone’s Life” since 2008, which is published by FreeSpeech Publications in Manila, Philippines. Anna Maria is a passionate advocate, volunteer, organizer, counselor, communicator, editor, and traveler, who’s always ready to pack up and go where she’s needed.


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