How to Budget this Holiday Season
By: Get A Grip
Tags: Millennial Money, Budget, Holiday Budget

The holidays are upon us. Crazy, right? March and April were both 100 days long, but November was only 2, so here we are. The COVID-19 pandemic has been a stressor in our professional and financial lives. Many are out of work, have reduced hours, or have been furloughed and are unsure when they will be able to return to work. Now throw the holidays into the mix, and we’ll all welcome the promise of a reset that is January, 2021.

In the meantime, we can try to incorporate more structure into our holiday budgeting this season to ease some anxiety and set us up for success. Whether you’re stepping out with nice gifts for your in-laws, splitting the grocery bill for your turkey dinner, or laying low at home surrounded by all the holiday gifts you bought for yourself, these tips are likely to bring you some financial peace of mind this holiday season.

Practice Financial Awareness

If you don’t already budget or track your spending, we’re not here to judge you. However, it can be helpful when budgeting for holiday expenses to have an idea of how your finances look normally (although is anything normal in 2020?)

Calculate how much money you have coming in, how much you spend and on what, and how much you have left over. Don’t worry, we’ve created an in-depth guide on how to break this down.

If you haven’t stepped into the world of budgeting, no need to panic. Just take a look at your income and spending for the past few months. No judgement, just lay everything out on the table so you understand where your money is going.

Make a List and Check It Twice

You may not be Santa Claus himself, but you still have lots of people to buy for. Your grandma, your best friend, the instructor of your virtual yoga class…not to mention things you need to buy like the green beans uncle Larry asked you to pick up or tickets to the drive-through Christmas light show.

So make a list of all your projected expenses. Write down every gift you need to buy, any groceries or experiences necessary for the holiday season, and write down an estimated cost for each.

Once you can see the big picture, you can decide where most of your money needs to be spent and can adjust to make it fit you overall budget. If you’re projected to spend half your monthly income alone on a new Kinara, it might be time to rethink things. Or maybe not. We don’t know your finances.

Be Honest With Yourself (and Others)

It can be easy to be idealistic during the holidays. We all crave the magic of celebrations, lights, good food, and family; it is the reason we love this time of year.

However, being idealistic with your finances only leads to feelings of guilt come January when your budget is tapped. Take a good hard look at your budget, and decide what you can afford and what you just can’t swing.

It can be hard to set limits, especially when your sweet niece tells you she wants a the new iPhone for Hanukkah. But when considering spending above your means, remember that you are only sabotaging whatever financial goals you set for yourself.

Once you have a good idea of how much you can spend, don’t be afraid to set boundaries with others to stick to that. Your future self will thank you.

It’s Simple, Really

Once you’ve taken an inventory of your finances, made a holiday spending list, and decided to be honest with yourself about all of it, you are well on your way to having a fiscally responsible holiday season. You might have been expecting a 10 step process, but we believe you only need basic knowledge to manage your finances.

Where many people get into trouble is when they are unaware of their income and/or spending, which can easily lead to overspending. Or when they ignore their credit card statements and decide to splurge on a gift, turning a blind eye to their mounting debt. The hardest part about budgeting for the holidays isn’t the technique, it’s owning up to the reality of your financial situation.

We can’t promise that this will help you win over your mother-in-law or manage the stress caused by spending the holidays alone this year (thanks, COVID), but hopefully by creating a sound financial plan, you can avoid a little bit of stress. And we could all use that right now, right?