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How to Make Sure Your Christmas Shopping Budget is Affordable This Year

Too often when I am Christmas shopping I use the “oh, just get it” approach: I find the “perfect” gift and I buy it, even if the cost is more than my checking account can handle at the moment. To make it happen, I hand over my credit card, all the while gritting my teeth and trying to convince myself it will be worth it to see the person’s face when they open it. Has that ever happened to you?

The problem with this approach is that January remorse happens quicker than you realize it will. Now the bills are there to pay, and the moment when that person “loved” the gift is long gone. A plan for how much to spend on Christmas shopping, while maybe requiring a bit more ingenuity in the gift-selection phase, would help avoid the inevitable depression caused by the new higher balances (and corresponding payments) on those credit cards.

Christmas shopping on a budget - How do you decide how much money to spend on gifts for the kids, decorations, etc? This post has expert ideas from around the internet and includes the author's own plan. Read it before you make your list!

I’ve been real with you about our finances before.  You know by now, if you’ve read this blog at all, that The Man and I are not coming from the perspective of “we’ve conquered this debt thing and we’re going to show you how!”  No, that is not us.  We’ve made lots ‘o money management mistakes and are probably still making them.  BUT we are attempting to crawl out of this hole we’ve made for ourselves, and the only way to do that is to just start doing it, am I right?  So, with that in mind, I do NOT want to use credit cards for Christmas shopping this year, I do NOT want to incur more debt, and I do NOT want Christmas to be all about materialism. I want to have a plan and set an affordable Christmas shopping budget.

So I did the Pinterest thing and the Google thing, and I found only a very few articles that talk about how to determine how much money to spend on Christmas shopping. Many articles make a big deal out of helping me save so much every week throughout the year so that I have the Christmas money ready by the end of the year — but they don’t tell me if that’s even a good amount to shoot for, based on my particular circumstances.

What do the experts say about how much to spend on Christmas shopping?

I did find THREE places that give somewhat specific figures. Even Dave Ramsey does not; he lumps Christmas shopping into the “Personal” category along with about ten other items and then says that together they should be about 10-15% of your income. Sorry, but that doesn’t answer my question!

Household Management 101 claims, “A good rule of thumb is never to spend more money for the holidays than you take home in your paycheck for one week. If you are in debt, or cash strapped, your budget may realistically need to be even less.” OK, now we’re getting somewhere. At least this gives me a figure to work with to help decide if I have been overspending. And according to that, we’ve been doing just about right.

Free From Broke says, “Some financial experts advise keeping your budget within two to five percent of your annual income.  So, if you earn $30,000 a year, then this allows the budget to rest between $600 and $1,500.”  Wow, that’s a pretty big range.  And that 5% figure seems excessive. That would mean that we have been UNDER-spending, which is NOT what I would have thought.

eHow reports, “According to personal finance expert Gregory Karp, you should spend no more than 1.5 percent of the annual family gross income on presents. If you have many deductions from your gross pay, you may spend a larger percentage of your take-home wages.”  This figure ends up being close to, but a little less than, the single paycheck one.  But does it include Christmas decor, and additional entertainment, and food?  This is not clear.

The world at large does have a basic consensus that AFTER you have come up with your overall figure, the next step is to make a list and divvy up that amount among all your different people and/or items that you want to buy. Then shop for bargains, make stuff, etc. so that you can stick to your “budget.” That all sounds reasonable to me — it’s just that first step that I wish there was a more definitive answer on.

So what am I going to do?

Here’s my strategy for attacking this thing called the Christmas shopping budget:

1) Start thinking now about gifts for the kids and décor/food that needs to be bought. Jot down ideas.

2) Have a confab with the husband to set a dollar figure for our Christmas shopping budget. Together we can decide on a reasonable amount. I’m thinking it will be somewhere around the 1.5% figure or the amount of one weekly paycheck, though; that 3-5% one just seems like a recipe for remorse in January, imho.

3) Make a more detailed list of what exactly to buy for each person, trying to keep all of our kids roughly equal.  Also plan the Thanksgiving and Christmas dinner menus and any special baking. Find out from hubby how many Christmas lights he needs to replenish this year.

One Christmas present that we get every year is a set of season passes to our local theme park. These have been a wonderful tradition for us, and they are the gift that keeps on giving, lol, since we can use them year-round. But I will need to take the amount for those tickets off the top of my Christmas shopping budget.

4) Start shopping as soon as possible, so that I don’t end up spending more than I want to in the mad rush right before Christmas. Also check into Black Friday sales.

5) Leave the credit cards AT HOME so that I am not tempted to use them while I am out. The purpose of all this planning is to AVOID accruing more debt!! NOTE TO SELF!!!

I think for now that this is a good strategy for planning and executing the Christmas shopping season this year.  Of course, this January might be a good time to start the “Must save $X every week” plan, so that I have the money for next Christmas saved up BEFORE December… sigh.

Here are some other articles about planning for Christmas shopping that I found helpful:

The Best Budgeting Tip for Christmas Ever at Baby Budgeting — I won’t spoil what her tip is; I think it’s definitely worth clicking through to find out for yourself.  Her article gives me much food for thought.

How to Prepare Your Budget for Christmas at The Budget Mama — She’s got a fairly detailed list of all the things you might need to spend money on.

Why My Kids are Only Getting 4 Gifts This Year at Cleverly Simple — I must have been living under a rock, because I had never heard of this rhyme before.  I would really like to incorporate this in our celebration.

Planning a “No Debt” Holiday at Thrifty Little Mom — She brings up the idea of a “family gift.”  And there are links to various tools to help plan and track your Christmas shopping.  Good stuff!

6 Steps for Planning Your Christmas Budget Now at Creative Homekeeper — Her sixth step is one that no one else has mentioned but could very well be the best part of the whole holiday.  Check it out.

Planning the Christmas shopping budget ahead of time — and sticking to it — is one way to start getting the finances under control. Christmas can be a make-it-or-break-it time for the family budget! Let’s not give into the pressure to buy, buy, buy. With a little creativity and some self-control, we can be much happier come January! Are you with me?



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  • Sounds like a wise plan to me! I don’t compare my Christmas spending to others but I do buy everything with cash. I think homemade decorations are fun and less expensive. A good time to buy decorations is after Christmas and after 23 years of collecting decorations, I now have all I need. So that saves me money now.

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I’m Ann (aka Annie), a veteran homeschool mom of five who HATES complicated!
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