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Develop Your Holiday Spending Plan

Nov 08, 2022 Holidays

The holiday season is just around the corner and now is the perfect time to start developing your holiday spending plan. Use these steps to get started.

A woman sitting in front of a Christmas tree and holding a holiday mug.

A budget, also called a spending plan, is a simple equation: income minus expenses should equal zero. But a budget is rarely simple. Follow these steps to build a holiday spending budget you can follow.

Step One: What Matters?

Before moving forward, consider what matters the most to you. Ask yourself these questions:

Talk with your family and friends about their thoughts and expectations for the holidays. Keeping these in mind, now you can develop a plan that prioritizes your time and money.

Step Two: Sources Of Spending Money

With holiday budgeting, it’s important to first determine how much you can afford to spend by evaluating your sources of spending money. Sources of holiday spending could include money set aside in a dedicated savings account, checking account, credit card, or loans.

If you plan to borrow for the holidays, keep these tips in mind:

Not sure how much you should spend on the holidays? Most financial planners and experts recommend spending no more than 1.5% of your annual take-home pay. So if your net pay (how much you make after taxes and deductions) is $50,000, you should plan to spend no more than $750 on the holidays. Remember, this is just a guideline. You need to adjust this number based on your current financial situation.

Once you know how much you can afford to spend, it’s time to break down your holiday expenses.

Step Three: Expenses

Make your list, and check it twice! Use the Holiday Budget Worksheet to list everything you need and want to spend money on this holiday season.

  1. Write your Total Holiday Spending Budget at the top.
  2. Divide that total among the different categories (gifts, travel, food, décor, entertainment, and other). Keep your answers to the “What Matters” questions from above in mind as you make these decisions.
  3. Once you have the total budget for each category, start to think about what you need to purchase in each of those areas.
  4. For your Gift Budget, use the Holiday Gift List Worksheet to plan out your holiday giving and divide your budgeted gift amount among your gift recipients.
  5. Research prices and stores to save and make sure you don’t go over your limit.

Step Four: Track, Track, Track

Now that you have your plan, it’s time to follow it. Make sure you’re keeping receipts and updating your budget and gift list regularly.

The holidays can be a time of stress or a time of enjoyment with family and friends. With a little planning, you can make your holiday season one to remember.

A woman staring into a window, there are holiday lights behind her.

Holiday Spending Survival Guide

Use our free Holiday Spending Survival Guide to easily keep track of your budget and following these steps.

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