How Much Should You Save for Holiday Shopping?

by | Dec 7, 2020 | Budgeting Advice | 0 comments

The holidays are a magical time of year, full of joy, cheer, and time spent with loved ones. Every year as the holiday approaches people often lose sight of these things though in lieu of worrying about finances and how to make regular bill payments, while still being able to afford gifts and items for holiday celebrations. While the holidays are definitely an additional expense, there are ways to ease the worry by setting a smart budget for the holiday season.
As the holidays approach, use these tips to create a holiday shopping budget and save for the additional expenses you will incur during this time of year.

How Much Should You Save for Holiday Shopping?

The first step in how much you should save for holiday shopping depends on your financial situation and the expenditures you expect to have during the season. Most Americans incur holiday costs related to gifts, food, travel, charitable donations, decorations, and more. Depending on which of these items you plan to spend money on, you can set a limit on how much you will spend on each category. 

If finances are tight for the year, consider setting an overall budget first that stays within what you can reasonably pay for with cash, avoiding the use of credit cards where possible. From here, you can easily allocate a set amount for each category. For example, if your total budget is $1000, take count of how many gifts you need to buy, what types of decorations you need, etc. and set a small limit for each item. 

Once the budget is set, create a list of all the items you need to purchase and keep a running tally of how much you have spent per item. This list can include:

  • Gifts: List of people you are buying gifts for 
  • Holiday Meals: List of special food items needed and the date you need each item by
  • Travel: List of various travel costs including airfare, gas for car travel, hotels, rental car, parking, etc. 
  • Charitable Donations: List of each charity and amount donated
  • Decorations and Wrapping Supplies: List all new decorations and wrapping supplies needed and cost 
  • Miscellaneous and Extras: Set aside a small amount of the budget for unexpected costs or items that do not fit in other categories. 

The most important tip for saving for the holidays is sticking to the plan you create and figuring out ways to earn extra money or save money in order to be able to handle the costs for the next holiday season. Consider selling unwanted items throughout the year or cutting unnecessary expenditures and setting that money aside for your holiday shopping. You can also plan to buy holiday decorations, wrapping supplies, and gifts on clearance after Christmas so that you have them for next year. With all of these tips, you are sure to have enough money to handle all your holiday shopping and stay within your budget. 

For more tips on saving money and creating budgets that work, follow us at Budgeting Advice 101!