Did you know that there are exactly 104 days until Thanksgiving, 105 until Black Friday, and 138 days until Christmas? To be honest, I didn’t know the exact day count until I googled it, but in my defense, I also know these holidays just don’t pop up. If I recall correctly, generally, these holidays have happened around the same time, on the same day, every year for, I don’t know, at least before you or I was born. So why do these holidays, that happen every single year, tend to sneak up on everyone like the guy in the mask from the movie SCREAM?
If you’re one of those people that actually plan ahead, look these up set money aside each month, and already know what gifts you’re getting for everyone down to your 2nd cousins then give yourself a round of applause. It’s great to feel prepared and confident about your finances via a budget/plan. In fact, if you are one of these people, don’t shut this post down just yet because I guarantee you will still be able to gain something from this. However, if you are one of those folks that are just getting started with budgeting or haven’t carved out a line item for holiday spending in your budget yet, then this article is for you.
Queue the Holiday Factor aka the budget buster of all budget busters. The holiday factor is often the most underrated and overlooked factor in all of the budget factors you can think of. Basically, the holiday factor is just that, a factor that should be considered throughout the year and incorporated into your budget before they happen. That is if you participate in such festivities :). According to an annual post-holiday debt survey conducted by MagnifyMoney.com of nearly 700 adults, Americans racked up an average of $1,054 of debt over the holiday season last year.
Going into debt for holidays that you know happen every year is NUTs to me, but I will admit I was not above it up until 2 years ago. I would spend whatever amount of money I could on my loved ones, no budget and with no concern for my poor bank account. Like John Hammond says in Jurassic Park, I “spared no expense!”. It was basically my motto for the holiday season until I got my $hit together and came to my senses.
So why am I writing this article now, five months away, in the blistering heat, so far from pumpkin spiced creamer and beanies? Because you have exactly 105 days to not to do what the rest of America will do which is go into debt over the holidays because they aren’t prepared. If you take the time to plan and save now, come execution time, you will be golden. While everyone is bringing debt into the New Year and having holiday remorse, you’ll be continuing along your merry way unscathed in 2019.
Here are 12 steps you can take to curb the Holiday Factor:
1.) Set A Realistic Budget Amount Now
Basically, you have 3 months to come up with all the money that you’ll need for Thanksgiving and 4 months for Christmas. Aiming to have all your cash before the holiday months begin, will ensure that you can at least cover the basics of your holiday needs without going into scramble mode. Make sure you factor in all the costs associated with the holidays when thinking about a budget. More importantly, create a budget that is realistic for you and where you are currently at in your money journey. If you’re just getting started and have $5 dollars in the bank, you have to get real with what you can and cannot expect to do this holiday season.
Gapyeong Example: You take home $3500 a month and your expenses for the month are $2,850 which leaves you with $650. Let’s say you want to lower the amount of cash you are putting towards your debt snowball but still want to pay more than the minimum payment on your debt, so you put an extra $300 to debt each month until the holidays which leaves you with $350.00. You then take the remaining $350 and put it towards your holiday sinking fund.
Realistically, unless you pick up a side-hustle or have a sudden windfall, your “DO NOT EXCEED” budget for the holidays should be a total of $1050.00 by October 31st. Establishing a “DO NOT EXCEED” amount upfront will provide you with a clear picture of how much money you can expect to have for the holidays, and it also allows you to budget towards a worst-case scenario. I always say the more conservative you are with your estimates (as in overestimating something), the better.
2.) Estimate Travel Expenses
Whether it be for gas and tolls or plane tickets and cabs, get a good idea of how much money you will need from your holiday “DO NOT EXCEED” amount. Example: You estimate that by Oct 31st you will have $1050.00 saved for the holidays. You already told your boyfriend/girlfriend/mom/dad/family/whatever, that you will travel to their place for Thanksgiving. You will need to factor in the cost of transportation/travel when sitting down to do your holiday budget. Let’s say you can drive to your in-law’s place so all you need is $50 for gas, tolls, and snacks of course. Make sure you allocate money from your $1050.00 for transportation ahead of time, to give you a clear picture of what you will have left for gifts.
3.) Estimate Food Cost
You will also need to estimate your potential food cost, especially if you are hosting. Create a list of the items that you will need and/or be bringing to the party and determine how much it will cost you. Then make sure you take it out of your holiday budget. If you have $1000 left and know that you are responsible for bringing a dessert, allocate the appropriate amount from your $1000 to food.
4.) Set A Budget For Decorations
I know some people love to go all out for this every year or just continue to use what they have collected over the years but this also needs to be considered in your budget. Really, a budget for decorations is up to you, but these little last minute items can really sink ships because they all add up!
5.) Figure Out Your Gift Giving List Now!
Once you figure out how much money you will be working with after travel and food expenses have been deducted from your holiday budget, you should write out a list of all the people you would like to get gifts for. I know we hate to prioritize the people we love, but when it comes to planning, there is no way around it.
Prioritize everyone on your list starting from the person you most want to get a gift for down to the person it would be nice to get a gift for. Then allocate every dollar of your budget until you hit zero, also, in this case, not hitting zero is ok, the more money you have left over, the better. Factor in work colleagues and white elephant party gifts as well, if you’re into that kind of thing.
6.) Take Inventory Of Your Gift Cards
Believe it or not but some gift cards will expire if you don’t use them. You might as well keep as much of your hard-earned cash as possible so why not use a gift card that you were given ages ago that apparently, you don’t care about? If you have any unused gift cards laying around, try to use those first towards potential gifts before dipping into your budgeted cash.
7.) Get Creative
Not everything has to be a tangible gift or something you have to spend money on. Think of your skills and talents and how they can serve others. Are you great at building websites? Gift your skills to that aunt of yours that’s been begging you to help her create a WordPress site.
Are you really good at cooking? Volunteer to come over early and help cook all the meals for everyone. Every host will always appreciate an extra set of hands in the kitchen, especially if you are a good cook. We put so much pressure on gifts and decorations that we begin to lose sight of what the holidays are truly about. Make sure you take inventory of your skills and lend a helping hand.
8.) Manage Expectations Now
There is nothing wrong with letting your loved ones know that you really can’t monetarily contribute to the festivities this year. It’s ok to tell people that you’re tackling debt or trying to make inroads with your budget and this year you simply can’t do much. Don’t feel like a Grinch because you have to tell everyone that you’re on a budget and they shouldn’t expect a lot from you this year. Tough. What’s more important, a holiday that comes at the same time every year or tackling the interest that is piling up on the debt you are trying to slay?
9.) Remember The Dollar Store
The most underrated store at holiday time is the Dollar Store. They sell everything from batteries to boxes. They also sell decorations for every holiday you can think of including super bowl plates and festive banners to match. Before you go to any big box store for decorations, plates, forks, etc., make sure you swing by your local Dollar Store first.
10.) Take Advantage of Black Friday
Planning ahead will allow you to take full advantage of all the Black Friday deals without any guilt. You will have plenty of time to do the research on the gift(s) that your heart desires and will also have the opportunity to check for deals ahead of time. Checking for deals ahead of time will also allow you to switch out gift ideas!
11.) Don’t Go Broke
Above all, DO NOT go broke trying to do the most for the holidays because you don’t want to let other people down. It’s ok to say no, and it’s also ok not to buy into the ultra-inflated consumerism that happens during this time of year. There will be deals upon deals, sales upon sales, but if you don’t have the cash in hand, SAY NO. It’s actually a pretty simple concept that a lot of people struggle with including myself, but I also know what is important in the grand scheme of things for me and what is not. Don’t go broke trying to convince everyone around you that you have it like that over the holidays.
The holiday factor is something that needs to be considered every year, and if figured out correctly, it can ease the stress and be a ton of fun. Remember there are exactly 104 days until Thanksgiving, 105 until Black Friday, and 138 days until Christmas. Get started now!
Questions for you:
1.) Have you already started a sinking fund for the holidays?
2.) Do you go all out or keep everything pretty low-key?
3.) What’s your favorite way to budget for the holidays?
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Steph says
Even though we have a sinking fund for the holidays, some of the things you listed are things we still overlook. So, thanks for the reminder!
1. We do have a sinking fund for the holidays, but after reading this post, I think I need to beef it up just a tad more 🙂
2. Definitely low-key. We send a few presents to my family and then get together with my husband’s immediate family, and that’s about it.
3. Keeping it low-key definitely helps with budgeting. We include our Christmas sinking fund in with our sinking funds for our bills, so we contribute to it every month. My husband and I have a really small budget for each other’s gifts and then we buy presents for our kids and keep it simple for family.
Just started reading your blog, and I’m loving all of your tips and perspectives!