Holiday Budget Planning: Start Now for Stress-Free Celebrations

The holiday season is supposed to be full of joy, but if you're not financially prepared, it can also bring a lot of stress. Let’s change that! The holidays may seem far away, but the expenses add up quickly—gifts, travel, meals, and events. The key to enjoying the season without financial stress is early planning. I know that September just started but the stores rolled out Halloween and Fall décor weeks ago, maybe you’ve even made a purchase or two of something for the upcoming fall season. I am sure you see the internet memes with countdowns to other major holidays. By starting now, you give yourself the gift of time, which means more options, fewer impulse buys, and a higher likelihood of sticking to your budget. So my question to you is what are you doing to set yourself up for a joyful end-of-year holiday season and not a dreadful January 1 bill season? I hope you will find some solutions and ideas in our blog below that you can implement over the next few months and years to come.

Make a List and Check It Twice: - you might have heard this one before. Perhaps Ole Saint Nick was on to something with checking his list twice.

Take the time and start identifying what holidays you and your family celebrate, perhaps starting with just grouping all of these holidays together will be eye-opening to realize that for some families and stages of life, we are possibly celebrating a holiday every month. After making that first list (and checking it twice) take a highlighter or create a separate list for each holiday that has costs associated with celebrating that holiday. My example for this is we might honor or celebrate Labor Day and Veterans Day but I don’t host people for a party, or spend money on gifts for these holidays.

Once you have an idea of which holidays you not only celebrate but also spend money on, this is a jumping-off point to start identifying how you spend money on these holidays, and WHY you spend money.

Setting Up your budget

So much of how we spend money is socialized into our upbringing and the community in which we live. As you work through your financial journey remember it's not just about the number and dollars, but also a reflection of WHY and What do I want to do in the future.

Begin building your budget list by identifying these categories as they relate to your holiday celebrations.  –

gifts, décor, meals, events, travel, Postage, supplies such as cards, gift wrap, as some ideas

If you have had some holidays recently pass you can go back into your budget and check your spending to record the expenses into the list, if not then start with an estimation or an ideal amount you want to spend on these categories per holiday. You might notice that this budget will add up quickly, but don’t stress you have options. We are going to talk more about those options.

As you start getting into each holiday period of time that you will begin planning gifts, and celebrations you will want to be specific in your planning. List the names of those you plan to give a gift to, set a number of cards you will send out, and make a meal plan for your events that involve specific foods or meals. As you become more specific in these categories you take control of your spending and your joy in spending for the holidays. Now that you’ve identified your holidays and expenses, it’s time to set a realistic budget that works for you.

Set a Realistic Budget -

Ideally, the best budget is one that is realistic meaning that you are likely to utilize the plan, that it is a comfortable amount to spend in your overall income utilization, and that you will not overspend because allocated too little to a category. If it is possible the best way to build a budget is to use past holiday spending as a guide this will help inform your budget, you can always adjust up or down. However, if this is the first time you are considering creating a budget for holiday spending then starting fresh by determining what you can comfortably afford this year is a great way to begin. Build in a buffer for last-minute expenses, an extra hostess gift you didn’t plan, or a holiday school party you forgot about even an extra few dollars could make those forgotten expenses a little easier to handle.

Prioritize spending categories can be really helpful in making adjustments to your budget. If gifts for family are most important, you might want to cut back on travel or dining out. Personally, food and gifts of service are important to me, so when my budget runs tight I will look for ways to spend my time and prioritize favorite foods and meals for those I wish to honor during holiday celebrations. One of the traditions that I have started in my family is homemade birthday treats, which might be cakes, cookies, pie, or whatever the birthday person asks for.  I start planning early in the month or month before to find out what treats they would like and add the needed ingredients to my grocery list.  My holiday card list has greatly dwindled through the years, and as my time as a working mom has been reduced my card list has been nonexistent in the last few years. When I do send out my cards, I prep my pictures and sayings early so I can watch for a great deal on holiday photo cards and snap them up quickly.  My goal is to bring holiday cards back this year, it is one of my favorite ways to build connections with my loved ones. Now that we’ve built out our budget we want to figure out what accounts we are going to utilize for our savings.

Accounts for holiday expenses and timing It Out:

Look into your local banks and credit unions to see what types of accounts they offer, and consider how you want to save your money. Are you saving all year in one account for holiday celebrations, or are you saving for just one holiday expense, maybe you are building costs that will be split some are being saved for future celebrations later in the year but some are being used each month. Depending on how you want to save will really change what type of account you want to utilize. 

If you want to save for future holiday expenses think about looking for a certificate of deposit (CD) with a small number of months perhaps a 9 or 10-month CD will work well for your purpose. Some credit unions offer club accounts and these accounts are intended for short-term savings with a timed need such as an annual holiday or birthday. If you are looking for more of a one-size-fits-all holiday account and need to be able to access the money multiple times throughout the year consider looking for a high-yield savings account that will provide some interest earnings on the amount that you save. You can also just save this money in your regular savings accounts that you might already have set up. How you set up your savings truly depends on how you think about money and if you can separate out funds mentally to go to the different categories you need or if you need to see the money going into separate buckets or accounts.

Think about how you will shop this year, if you are building your savings into each month to be able to manage your holiday budget, you might also be able to begin your shopping early. Looking at ways to spread out the costs and timing your purchase before price hikes occur can help to balance your budget.

As we look forward to the joys and celebrations of the holidays, taking the time to plan your finances now can help you avoid the January financial blues. By making a detailed list, setting a realistic budget, and thinking carefully about how you save and spend, you can ensure that your holiday season is filled with happiness, not stress. Remember, the holidays are about joy and connection—not about how much you spend. Start small, make thoughtful choices, and give yourself the gift of financial peace of mind this year. Download our free holiday budgeting template to get started on planning your best holiday season yet.

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