This year will be my family’s 6th debt-free Christmas. What does that mean? That means we pay for Christmas in cash – we don’t even have a credit card to use if we wanted to! Why is this important? Well, I’m a firm believer in not just living a real life on a budget but also in not starting the New Year off still paying for things you bought the year before.
Call me crazy but that’s just my philosophy. So, if you want to make sure that you keep everything in check this Christmas season, let’s talk about how to budget for Christmas and make paying in cash for Christmas a reality.
What to Include in Your Budget
So just what do you include in your Christmas budget? Well, everything you need to buy that pertains to Christmas! Let’s break this down:
- Travel expenses
- Food (potlucks, hosting dinners, eating out, etc.)
- Charitable contributions
- Holiday events
- Christmas photos
- Christmas cards & stamps
- Gift wrapping supplies
Notice how “presents” is at the bottom of the list? That’s because when we typically think of a “Christmas budget” we only really think of presents. That usually means we end up forgetting about all of the other super important stuff like charity giving and traveling to see family and friends. That’s why I want you to account for your gift buying last – not first.
Here is our typical Christmas Budget breakdown (we’re not planning to do any traveling this year which is why “travel” isn’t listed):
Make a List
Even Santa has a list y’all! Instead of just willy-nilly buying everyone and their grandma a gift this year, make an actual list of the people you want to buy a gift for. Then next to their name make an “ideas list” of gift ideas to give to that person. And here’s a tip for you – be as specific as possible including listing out any sizes (if purchasing a clothing or shoe item). This will help you while you’re out shopping to know specifically what you are looking for. You won’t be as swayed by all of the sales going on because you’ll know what you’re looking for!
This is what my breakdown typically looks like (I keep adding ideas as they come to me during conversations):
Wondering where I got my planning sheets? I made them! You can head here to see my entire Budget Planner that includes these holiday worksheets!
Set Up Your Christmas Fund
We keep a completely separate bank account that we use to pay for Christmas. We set aside money typically every week from our household budget towards this Christmas Fund and we do it all year long. That way when it comes time for Christmas we already have the money ready to go! Bonus is that we know exactly how much money we have to pay for Christmas – our budget is whatever dollar amount is that account!
***Have you signed up for our Debt-Free Christmas Challenge? Join over 6,000 other amazing folks and get your Christmas budget in order before Christmas! Sign up here.
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The great thing about saving for Christmas all year is that it keeps Christmas from sneaking up on you. I don’t know about you, but I know that’s happened to me more times than I care to admit to. To set up your Christmas Fund you can set up either a checking or savings account (totally up to you). I recommend an internet bank as they are typically fee-free and if you open up a savings account with them you usually end up with a higher APY than a “normal” bank.
To Give or Not to Give…
Okay, so I have to go on a little rant here y’all…you do not have to give everyone and their second cousin a gift. It’s okay to not give someone a gift even if they gave you one. It’s okay because here’s the deal – a gift even out of obligation or because you feel like you’re supposed to is not actually a gift. A gift is something you give freely and if you’re giving because that’s what you’re supposed to do then you’re not really giving a true gift.
I say this because as a Christian I can tell you that no one in the Bible did Jesus say that we must give everyone in our office or at our neighborhood potluck a gift. Nope. He only told us to love God and the people we come in contact with. And loving has nothing to do with buying the latest impressive gadget. So do NOT feel bad for not buying a gift – a true friend will not hold it against you and will understand.
For more on budgeting for Christmas watch the video below:
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