Begin with a Budget

The very first thing you need to do to avoid being challenged by Christmas debt is to SET A BUDGET.
Based on your usual monthly income, and any savings you have that you are willing to spend, figure out how much money you want to spend (or can afford to spend) on Christmas.  Once you know how much money you have that you can spend, or want to spend, set a budget.  Make sure you include all the areas in which you’ll have extra expenses during the season, not just Christmas gifts.  Here are some thing to consider including:

• gifts for family and friends
• gifts for teachers, bus drivers, day care providers, etc. (if this applies to you)
• cost of Christmas dinner.  Include not just  food but also any table decorations, favours, wine, etc.
• travel (include gas if you drive out of town)
• baking supplies
• cost of other holiday foods. Include the things you expect to take to potluck meals, and the extra food if you’re having out of town guests
• special clothing such as Christmas outfits for the kids, a cocktail dress for the office Christmas party, new shoes, etc.

Once you’ve established the budget for those bigger categories, take your gift budget and break it down further for how much money you want to spend on the individuals (ie … for nieces and nephews, what do you plan to spend, for each of your own kids what do you plan to spend, etc.).
If the amount of money per person ends up a little skimpy after you’ve divided it by all the people on your list, then you know you need to start using strategies to save money where you can in order to meet that budget, and/or to be able to shuffle some of the money around by saving in one part of your budget so you can spend more elsewhere.  A budget is a plan … a work in progress that can change as you go along.  The most important part to set in stone is the maximum amount you are willing to spend.  How you allocate that money will change as you go along and keep track of your actual expenses.
Feeling the pinch of your budget already?  Don’t despair.  There are lots of ideas coming up to help you trim your budget, cut costs, and find hidden money.