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Time to Think About the Christmas Budget

Christmas!! In September?! Are you nuts-o?

No I haven’t lost my mind and believe me, it feels less like Christmas here in Phoenix than it does probably anywhere else in the country. It’s still over 100 degrees everyday. But there is a reason I’m talking about Christmas.

If you get paid every two weeks there is a good chance that sometime in the next few months you will have a three paycheck month. Yay for extra paychecks! Use that extra paycheck to fund your Christmas budget.

I’ve used my three paycheck months to fund Christmas since I started working. One thing I really like about it is that it sets the amount I have to spend at a percentage of my income. I always spend two week’s pay on Christmas. When I was making a small income that meant I spent a small amount. When I was making a large income it meant I spent a large amount. I like that. I don’t have to decide what is reasonable, it’s already decided for me. Plus when I used that extra paycheck I didn’t have to find room in my budget for Christmas.

So once you have that extra check in hand pull out a fresh budget, whether that be an excel spreadsheet or a piece of paper and pen, and make a Christmas budget based on the amount you have to spend. Put the amount at the top and then list everything you want to spend money on that is Christmas related. People’s gifts, the Christmas party, new decorations, Christmas cards, traveling, wrapping paper, etc.

Once you have a list of everything you want to buy start putting the amount you plan to spend on each item next to said item. So it might look something like this…

  • Grandma $50
  • Mom $100
  • Dad $100
  • Christmas Cards $20
  • Christmas Dinner $100

Once you have an amount next to each person or thing add up the total and see how it compares to the amount you have to spend. In my super simple budget example I’m spending $370. If the amount I have to spend is $400 then I’m done. However, if the amount I have to spend is $300 then I still have some work to do.

If you are like most people then you probably allotted more than your budget and will have to make some cuts. Go back through your list and decide where you can cut to get the budget to balance. So our new budget might look like this…

  • Grandma $40
  • Mom $80
  • Dad $80
  • Christmas Cards $20
  • Christmas Dinner $80

In this case I left the Christmas card budget in full and cut a little from everywhere else. You could just as easily decide that Christmas cards aren’t that important and give a little more in presents. Or stick with a more lavish Christmas dinner. There is no right or wrong answer, spend the money where it is most important to you!

Now, things will happen through out the Christmas season that will cause you to want to blow your budget. Maybe they do a gift exchange at work. Or perhaps you see that oh-so-perfect gift for someone who isn’t on your list. When that happens you will have to make a decision. If you overspend in an area you will have to cut another area. Let’s say I absolutely must participate in the gift exchange at work. I might make a change like this…

  • Grandma $40
  • Mom $70
  • Dad $70
  • Christmas Cards $20
  • Christmas Dinner $80
  • Gift Exchange $20

I added in a gift exchange by spending less on Mom and Dad. Now of course the problem with this is that often times these things are last-minute and the money has already been spent. If I had already bought Mom and Dad’s presents then I would have to cut someplace else. That gets harder and harder to do as the holiday gets closer. But you get the idea.

I hope you have a wonderful (and cash filled… not plastic!) holiday!!


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