I used to think Christmas shopping kicked off in early December but now, with Black Friday and Cyber Monday occurring in November, I have to reconsider my dates! With that in mind I thought it was time to talk about a Christmas budget.
Its so easy to get caught up in the spending frenzy at Christmas time. My wife and I spent most of Black Friday shopping for Xmas presents. We have a lot of people to shop for as I'm sure most do. It's very difficult to stick to a budget at this time of year because it's so easy to get caught up in the excitement of the holiday season. If you create a budget and stick to it, you will avoid the perennial January question ... How do I pay for all this?
In our home, a budget at Christmas generally comes down to spending less than we would really like. Of course we want to spend more on family and friends but we realize we can buy nice gifts without breaking the bank!
Here are a few tips to help you with your Christmas budget.
1 Sit down with your spouse/partner and make a list of all those people you have to buy gifts for and attach a dollar limit to each. Add up the total, gasp (!!) and try to bring the total to an acceptable level ... always bearing in mind what you can afford. By the following February/March some of the people you bought for may not even remember the gift, so why spend beyond your means.
2 Agree on a total to be spent. It is very important to set a realistic total spending amount ... only you know what you can afford.
3 Write down the final listing and pat yourself on the back to celebrate being one of the 5% of Canadians who undertake this exercise !!
4 Go shopping and track your expenses. There are many electronic ways to do this but pen and paper are fine!
5 Be flexible on individual gifts but always bear in mind your total spending.
6 Don't forget to include expenses for family dinners or eating out if you wish to include all your expenses over the holiday period.
7 Pay off your credit card in full in January. If you ever have doubts about doing this, just take a look at the box on your credit card statement which tells you the number of years it will take you to pay off the balance using the minimum payment required. That number may scare you! So the bargain that you just couldn't resist is no longer such a bargain!
Pat yourself on the back again if you pay the full amount owing as roughly 30% of Canadians carry a balance on their credit cards.
We recommend this exercise as it will remove one huge area of stress from your lives over Christmas and the New Year.
Remember that time spent with family and friends is beyond value.
Have a great Christmas.