Welcome!
This is Day 2 of the 21 Days to a Stress Free & Debt Free Christmas. I’m so excited that you are joining me for what I hope will be a really helpful series designed to walk with you step by step through the Christmas season in a way that ensures you keep your sanity and that you don’t overspend.
Today is probably the most important aspect of achieving a stress free & debt free Christmas – determining your Christmas budget.
Now that you’ve completed day 1 of this series, it’s time to dive into more of the details. While it might be tempting to just start buying, I’m encourage you to stop where you are. The whole purpose of this series is to get through the Christmas season with minimal stress and zero debt. It would be foolish to proceed without having an idea of what you can afford to spend.
Let’s Start at the Very Beginning
It all starts there.
That’s where your Christmas budget comes in.
If you read no other posts in this series, I believe that determining your budget is the most important aspect of having a stress free and debt free Christmas. I’ve always been a big fan of budgeting. I believe it’s so important because it is your link to reality. Without a realistic budget, I can guarantee that you will overspend.
Marketers and advertisers {even deal bloggers} are good at what they do. Retailers convince you that your child needs every toy on the market. They portray a sense of urgency around the sales and it’s easy to get caught up in it. Before you know it, your children have way too many toys under the tree and you have no clue which card you charged it all on or how much you even spent.
I don’t want that for you this Christmas.
So, please hear me when I say that you must create a realistic Christmas budget this year. Please don’t skip this step. As always, if you are married, make sure you are doing this together with your spouse.
First Things First
The first step to creating your Christmas budget is to determine how much you have to spend. Whether you have been setting money aside all year long or just put money aside in your budget, now is the time to determine what you have available to spend.
It might be tempting to work from the bottom up, deciding how much money you will need to execute the Christmas you would like to have. Budgeting doesn’t work that way. Start with your top figure and then you’ll get to the detailed spending later.
If you have very little money to spend, that’s fine! You can shave a wonderful Christmas with a small budget. Feel free to try and earn some quick cash now if you are able. Every little bit helps.
Break It Down Further
Once you have your top level Christmas budget set, then you should break it down into categories. Your categories will be specific to you, but take a moment to think through the entire Christmas season. Jot down everything that will involve money and categorize those expenses as best you can and in a way that makes sense to you.
Special Events
Travel
Once you know your categories, then you can assign a smaller budget for each category. Make sure you don’t let your categories cause you to re-think your top level budget. You set your Christmas budget based on the money you have to spend, so that top level number is unchangeable at this point {unless you earn some quick cash}.
When you go to assign a budget for each category, you may realize that you don’t have enough money for the categories that you’d like. You may eventually have to eliminate some of the smaller categories, but feel free to keep them in for now and just assign them a realistic number, even if it is low. There are some great ways to cut costs at Christmas time, so let’s not give up on some of your categories just yet.
How to Track It
Now that you have determined your overall budget and you have your categories set, you must decide the best way to work your budget and track your spending as the days unfold. I’ve heard great things about Dave Ramsey’s Every Dollar budget {you know how I love Dave and his Total Money Makeover*}, but I don’t have much experience with that tool specifically.
You might use a Google sheet that is synced to your smartphone.* This would allow you to review and update your budget on the go. You can easily share the document with a spouse so that you each have access to it. Pencil and paper work great as well too. The important thing is that you figure out a way to track the spending somehow. Choose a method that is realistic for you, so that you will actually use it.
A Cash Only Christmas?
I’m still a huge proponent of using cash. We are not perfect at it, but it is the simplest way for us to keep track of our spending. You know you are finished spending when cash is gone. Otherwise, you will need to return items in order to spend more. It really forces us to think seriously about every dollar we spend.
Since so much shopping is done online, you may want to consider using cash to purchase a Visa gift card or an Amazon gift card*.
How are things going so far?
Let me know in the comments!
{Note: This post contains affiliate links. Read disclosure here.}
