christmas ornamentsSo last week we set our Thanksgiving budgets and made Thanksgiving travel arrangements. Today it’s time to spend a few minutes thinking about Christmas. In case you doubt that the holiday season is upon us, a few stores have already set out their Christmas displays. No, it’s not time to go tree shopping, but you should set a budget, make a list of gift recipients, and look into travel arrangements, especially if you need to make any vacation requests.

Set Your Christmas Budget
Since we’re still in early September, you can set a budget unemotionally now. If you wait until later, you might start thinking about all the things you could do if you just go a little over budget, instead of what you can actually afford now. To make your budget, look at what you spent last year. Now see when you actually paid off all the expenses. If you didn’t pay off your statement in full the first month it came, then you can’t afford to spend that much. Look at the amount you could actually pay that first month. There’s your budget.

Of course, a few factors may have changed your budget. If you used a bonus to pay for your expenses, are you confident you’ll receive that same bonus this year? If you can, plan your budget without it. Do you have any additional children or family members straining your budget? Is your salary higher or lower?

When making the budget include all of the following:

  • Travel costs (hotel, airfare, car rental or gas)
  • Gifts, wrap, and cards
  • Postage/shipping
  • Food (if you host any of the festivities)
  • Decorations (tree, lights, ornaments)

Make Your Gift Recipient List
Once you know how much you can spend, make a list of all the people you give gifts. Can you cut that list? I’ve chopped a couple friends off my list because we weren’t able to find meaningful gifts anymore. Instead, we have dinner. Remember to include secretaries, teachers, and employees on that list. Include a couple hostess gifts, too.

Set a Gift Budget
With your total spending in mind, divide the gift portion of the budget among the individuals on your list. You don’t have to list actual gifts now, but set a maximum price now before you start seeing all the cool things you could buy them that are out of your budget.

Consider Alternative Gift Sources
If you traveled outside the contiguous 48 states this year, you hopefully stocked up on Christmas gifts. You can often find unique, affordable items your friends and relatives won’t find locally, and that mean a lot more than a waffle iron from Target. The year my husband and I honeymooned in Ireland, we brought back holiday gifts for several people. Since the Euro was 15% lower than the dollar, we saved money on them, too. This year, I’ve got a list of gifts to buy in Belize, where the dollar is very strong and we can find handmade, local gifts.

Look Into Travel Arrangements
You don’t have to book anything now, but figure out your dates and start monitoring airline prices. If you have to request vacation time, at least notify your boss now and put in the request once your ticket is booked. You should also look into hotels if you need one.

Set a Party Budget
If you’re in charge of one of the holiday parties, set a budget for it. It’s another potluck kind of day, but you should provide the main dish and some alcohol, so factor that into your budget.

And that’s it for now. With your budget in mind, you can be on the lookout for gifts in your budget or start stocking up on supplies. You’ll avoid going over budget and start the new year on a better financial foot if you start your planning before the holiday spirit kicks in.

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