According to news reports, 29% consumers plan to cut their holiday spending this year. It seems like every year, shoppers insist they won’t overspend this Christmas. They promise that they’re slashing their budgets. They promise they know how to control Christmas spending. Then the holiday spirit takes hold. Rather than questioning a purchase, shoppers just buy it, because it’s just $5, $10, $20.
Does this sound like you? Last year, it sounded like me. Fresh out of grad school and with money in our pockets, my husband and I were extra generous. We didn’t realize how much we’d spent until January. This year I’m returning to my usual shopping list and Christmas spending limits.
That’s why I was very interested to see a report on Good Morning America about how to determine your holiday budget. The advisor recommended spending three times your daily income. In their example, they used the simple annual salary of $52,000. That translates to $1,000 a week or $200 per day. Multiply that by three and you get $600. That’s your total holiday budget for Christmas gifts, decorations, travel, and all other holiday-related expenses.
According to this method, my husband and I can spend over $1,000 this year, which is what we spent last year. Given that we don’t have kids, that feels like too much. I’m planning to spend around $600. That includes all gifts, decorations, charitable donations, and holiday travel. Over the course of the week, I’ll be discussing how I plan to save money on my holiday shopping and maybe come in under budget.
How much do you plan to spend this Christmas season, and how do you avoid overspending?
