Holidays are tough for budgets. It's easy to get carried away on presents and entertaining. Decide before the holiday arrives exactly how much you are going to spend. Don't go over that limit no matter how much advertisers would like you to. You might also adjust your travel habits. It's fun to travel, but you might want to take shorter trips or stay in less expensive hotels if this would help you meet your household budget goals.
Fortunately, creating a holiday budget is less complicated than you might think.
All it requires is taking an honest look at what you spend and what you earn. The hardest part? Sticking to your holiday budget once you've drafted it.
Income and Expenses
To start your budget, list your regular monthly income streams. This will obviously include your monthly salary. It should also include any rental payments you receive, child support or alimony payments, payments you receive for freelance work, monthly disability payments and any monthly fees you receive as a result of a legal settlement.
Now that you know exactly how much money comes into your household each month, it's time for the trickier part, listing your expenses.
Some expenses are fixed. These include your monthly mortgage bill, car payment, student loan payment, monthly garbage service and rent. Other expenses vary each month. These expenses include the money you spend on groceries, your electric bill, your phone bill, gas for your vehicle, and the money you spend on clothing and entertainment. Your budget should also include money reserved to build an emergency fund.
Next, you will need to come up with a set amount you want to spend during the holidays. In that amount includes: groceries for feeding a large gathering, gift cards, presents, gas, etc.
The key to listing expenses is to be realistic. Your budget is not realistic if you don't save any money for going to the movies, eating out or taking short trips.
Shoring up Your Budget
If you find that you're blowing your holiday budget, it might be time to make changes either to your budget or to your holiday spending habits.
Maybe you've been unrealistic with how much you want to spend during the holidays. Adjust those budget items so they more accurately reflect how you really live.
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