Don’t look now but the holiday season is less than five months away. Depending on your financial situation, this fact can either excite or terrify you. It’s no surprise that there is a huge financial burden that comes along with the holidays. It’s time to take some of that financial pressure off of the holiday season and put the “Happy” back in “Happy Holidays.”
A key way to take that financial burden off of the holiday season is to start planning and budgeting for it NOW. If you’ve never budgeted before, the idea of starting from scratch can be sort of daunting. However, a budget isn’t scary, or at least it shouldn’t be. It’s something that when done well can be a lifesaver. It’s important to keep in mind that there isn’t one master way to budget. Rather, you have to figure out what’s best for your family’s situation.
To begin, you’ll want to get an overall idea about your family’s financial situation. Write down a list of all your monthly income, including your wages, child support, or any other type of income that is consistent from month to month. Next, write down a list of all your monthly expenses. This will include things like your mortgage or rent, utilities, debt, groceries, and car costs. Finally, write down a list of all your unnecessary expenses such as new clothes or eating at restaurants.
If you aren’t sure where your money is going each month, check with your bank to see if you can obtain a copy of your debit and credit card transactions.
Once you know where your money is going you will be able to start setting monthly caps on your expense categories. You should make sure you set limits/budget what you need for your expense that you cannot control such as rent, insurance, and utilities. After that, create spending limits for your unnecessary categories. In this case, if you’re planning for the holidays go ahead and add a column for gifts so you can either set aside money each month and buy gifts at once or buy a few gifts each month so the burden isn’t so large during the holiday season.
Budgeting takes time and it can be tricky at first, but it will pay off in the long-run. By knowing where your money is going you can plan ahead and adjust your spending habits to meet your family’s specific goals – like saving for college, planning for retirement, or taking a big family vacation. Be sure to take advantage of free online resources that offer budgeting guides, sample budgets, or downloadable budgeting sheets.