It’s amazing how the first snowfall, the first Christmas carol, or the first day of December can trigger a generous spirit and an outpouring of hard-earned money towards so many things.

Planning the Holiday Season Budget

To avoid January regrets, plan ahead for the upcoming holidays.  The bills will come, and they’ll need to be paid so there’s no time like the present to set a target and stick to it.  It might even be fun to put a cap on things that might otherwise lead to unnecessary New Year’s resolutions caused by a combination of ‘the holiday spirit’ and an over-heated credit card.

Start with a list:  All those who you wish to buy for this year, and past approximate amounts.  Don’t forget your spouse, your pets, teachers, in-laws, friends and those you might want to thank for their past year’s generosity to you (like someone who’s driven your children to school in a pinch).

Add to this list those who you would like to tip – for paper delivery, hair dressing, cleaning people, baby-sitters, etc.  There is no hard and fast rule of course for this category – it depends on your level of relationship and whether you feel a little extra is warranted, and would be appreciated.

When it comes to family, write down approximate past amounts for gifts, cards, stocking-stuffers, and even entertaining.  If it’s your turn to host, the grocery bill will be higher than normal; if it’s not, budget for a host gift or whatever is appropriate to thank those hosting.

And finally, think about your year-end giving:  to your local church, religious organization, charities of choice, or donation to someone in need.  Making this category part of your plan is a strategic move.  It ensures that this category is not an after-thought – but actually part of your holiday gift giving plan.  If you put some thought into it (rather than spontaneously giving to those who catch you at the right time with whatever you can afford in the moment), you won’t feel like you are succumbing to guilt-induced pressure.

Now, review your list (if you are married, combine everything and review the totals together).  Add up the amounts and determine whether it is affordable based on your current position and other financial goals.

If the total is a little shocking and just doesn’t appear affordable, or worse it will put you in debt, ask yourself these questions:

“What if I reduced this amount substantially?”  “Do those who I am giving to this year want me in debt?”  “Would they rather I give something I can afford?” 

I can assure you, your loved ones (perhaps other than your young children!) care far less about gifts than you think; honestly, they would rather you live within your means and sleep well.

A well-meaning card, a lunch out, or a charitable gift given in the name of a friend can all be great alternatives to an expensive retail purchase.  Get creative and put more emphasis on the sentiment than the cost.  You could see your total expense line drop very quickly.

Beware of the retailers who want you to over-spend (hint: they all do!).  You‘ll hear some unique messages in the next several weeks:  ‘Give to yourself this year – you deserve it’; ‘Give a little more to your pet this Christmas – they love you’; or ‘Splurge, and tie a red bow around that new car you can’t afford’.  They are not on your side.  A little control on your part will be rewarded come January.

Is it cold to take control of your holiday shopping?  Is it denying the inner desire to let the holiday spirit drive your generosity?  Sure, a little.  But without a few reins to curb retailers getting the better of your wallet, it’s best to put up some protection with a holiday plan.  This isn’t about not being generous – it’s about being generous in a planful way that is contained and affordable.  It just might bring back the joy of giving.