Budgeting for the Holidays

December 6, 2018

With Black Friday and Cyber Monday kicking the holiday season into full gear, there is no doubt that money and finances are in the back of everyone’s mind. As a young adult, the holiday season entraps us into wanting to purchase meaningful gifts for friends and family while cutting back on how much we spend.

 

With pricey items such as technology and electronic devices, it is worth it to seek out discounts and price cuts to ultimately fulfill your gift list within a reasonable budget. To start planning your budget, consider the funds you have in your bank account and the amount of people you would like to give gifts to. The following five tips will help you budget reasonably during the holidays.

 

Photo: Tim Mossholder on Unsplash 

 

Analyze your savings and checking accounts

One of the first steps you should take when planning a holiday budget is to analyze how much money you have in the bank to determine how much you can really afford to spend. Once you determine how much you have saved, it is best to set aside a portion – I like to say approximately 40%  – for your holiday shopping. To avoid overspending and save money while you shop, start shopping early and avoid purchasing your gifts all at once. I like to start mine on Black Friday!

 

Create a list

Of course, it would be great to buy presents for all of your friends and family members, but in reality, your list will need to be narrowed down. Look at your budget and see how many people you will be able to purchase gifts for this holiday season. When writing your list, I advise prioritizing people according to your relationship with them, whether they are a friend, relative, or coworker. I also suggest that you consider who has previously gifted you in the past.

 

Set a budget per person

Once you set aside funds for the holidays, set a budget per person. I suggest setting a higher budget for those who are most important to you, such as family members, while setting a lower budget for others. It is also beneficial to think about the wants, needs, likes, and dislikes of each person you will be gifting. If you plan out what you will get for each person ahead of time, you will find it it easier to stick to your budget.

 

Choose gift based on your relationship

Thinking about your relationship to each person you are gifting is important when deciding how much to spend and what to buy for them. If you are purchasing a gift for a coworker, for example, the gift will be on the budget-friendly, smaller side, acting as a token of appreciation. On the other hand, gifts for family should be more personal and meaningful, especially for individuals such as your mom or dad. For budgeting purposes, it may be wise to consider group gifting. For instance, if you are gifting your parents, you could purchase a nice gift with your siblings and split the price. Group gifting can cut the price in half and result in a meaningful gift.

 

Think about end-of-the-year giving

If you have a charity or cause that is close to your heart, do not hesitate to gift them with a donation. Even a small amount, such as $1.00, can mean so much. There are many end-of-the-year calls for charity giving and donations, whether physical or monetary, and many organizations often have holiday drives. Consider splurging on a toy to donate to Toys for Tots or purchase a few extra canned or boxed goods to donate to your local food pantry. If you are thinking about charitable giving, be sure to ask for a donation form or keep the receipt for your purchases. These will come in handy when you go to file your taxes.

 

Holiday shopping can be stressful, but knowing how much you will be spending in advance will allow you to enjoy the season of giving. Aside from budgeting for the people around you, do not forget to set aside some funds for your own indulgences! There are plenty of services and items to splurge on, so make sure you have the funds to gift yourself.

 

​Sara Kim graduated with a B.A. in Journalism and a double minor in Health Policy and Management and Asian American Studies from Ithaca College. She currently works as an Event Coordinator at a non-profit. In her free time, she enjoys working out, reading, watching movies, and cooking. Fun fact: as a foodie, she loves to try new foods and travel to new places.

 

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