How To Budget For Christmas
It’s that time of the year. Just under two weeks till Christmas. Personally I’m a last minute type of Christmas shopper, but this year I’ve been surprisingly organised, with only my kids and my partner to shop for. While it might not be possible to financially prepare for Christmas now, it is a great time to start thinking next year and how to do better. So, here’s my tips on how to budget for Christmas.
Why budget for Christmas
As we all know, Christmas happens every year (if you celebrate it!), and every year it requires money.
The predictability of it makes it relatively easy to budget for, you always know when it is going to happen and what is going to be required.
By budgeting for it, you can split the cost throughout the year rather than having big costs in December.
This is done by estimating the overall cost of Christmas and then dividing it by the amount of pay periods you want to use to split the cost.
For example if you want to split the cost of Christmas over 6 months, you are paid weekly and you estimate that all up Christmas will cost you $1,000. $1,000 divided by 24 is about $41.70, this is the amount you need to put aside weekly if you want to save $1,000 in 6 months.
If you start at the beginning of June, you will have $1,000 by the end of November to spend on all things Christmas!
Creating a Christmas budget
There are many costs associated with Christmas so figuring out how much it all is going to cost you can feel overwhelming.
Here’s how I break it down to make figuring everything out easier:
Gifts
Gifts are fairly obvious part of Christmas for most of us.
You can either write down everything you bought this year and use that as an estimate for 2023, or you can write down each person you need to buy for (don’t forget possible Secret Santas for work dos!) and set a budget for each person.
I budget a certain amount for each person I need to buy for and keep track in a little notebook I created.
I find this an easy way to track ideas, who I’ve already bought for and so on.
This is an easy way to allocate money to go towards gifts for each person and see what it totals into.
This way the only problem is that if you forget someone, then you might end up going over budget.
If you don’t want to go to quite this extent, you could consider a Christmas Club, The Warehouse for example has one.
You get a specific account and put money aside as you shop throughout the year. The Warehouse Christmas Club then offers a discount during the Christmas season if you use this account to pay for your purchases.
This way you will have some money set aside to spend on gifts and what nots during the Christmas time, easing the financial pressure.
Food
Food might be a really hard category to estimate, considering the raging inflation and soaring supermarket prices.
For this reason I would really recommend saving receipts and writing down how much you have spent this year, this way you will have a better idea what you might spend.
The other option is to just decide a dollar amount you want to spend on food, save that amount and then do your best to stick to it come Christmas time next year.
The supermarkets in New Zealand also offer Christmas Clubs with Countdown, New World and Pak’N’Save all offering their own clubs.
They all work a little bit different when it comes to how you deposit money to the account and redemption, but the gist is that you put money on this account, and you get a bonus (kind of like an interest rate on a savings account).
This account can then be used to buy food during the Christmas time (like I said, they have different rules on when the money can be spent, so make sure you read the rules properly!).
Other costs
Christmas can easily come with other costs too, like travel to see family, decorations and a tree, Christmas related events and activities, Christmas parties, and so forth.
In Finland Christmas is a very family orientated, quiet holiday. It is not spent with friends, and in my family, alcohol was never present either. So, the difference to a New Zealand Christmas is pretty big for me.
BUT we would have what we call “pikkujoulu” (literal translation is “little Christmas”), which is kind of pre-Christmas party that you have with your friends, and/or work, and those can get pretty rowdy, before you calm down for the actual Christmas.
It is not uncommon to go to multiple pre-Christmas parties starting late November, as usually work has one, but also friend groups have their own ones.
In Finland that would be a costly part of the season!
Some of these other costs are predictable so you can take those into calculations when you are figuring how much you need all up.
Some come out of the blue, and that’s just life sometimes. Otherwise you can just save a bumper, “just in case you need more money”-bumper.
If you need this bumper money, great, you were prepared. If not, you can roll it over as a head start for saving for next Christmas, or treat yourself.
How to save money on Christmas gifts
The main way to save money on Christmas gifts is to be organised.
If you have an idea who you are buying for and what to get well in advanced, you can keep an eye on for sales throughout the year and save some money.
There’s also nothing wrong with buying pre-loved goods, especially when it comes to kids and their toys!
Our big gift for the girls this year is a pre-loved big train track set I found on TradeMe.
Another way to save money on Christmas gifts is to do home made ones.
Although you need to be careful with this approach if the ingredients or materials you need to buy in order to make the gifts will cost just as much or more compared to just buying the gift ready made.
But in the end, Christmas should be about being with family or loved ones, whoever they might be.
Hopefully creating a Christmas budget will relieve the financial pressure of it all and you can focus on enjoying the time with family and friends.
Do you budget for Christmas or just wing it this time of the year? Let’s chat in the comments!
