Wednesday, November 19, 2008
Works For Me Wednesday: Christmas Budget Planning
Each year, we save a certain amount of money each month for our Christmas spending. Since we use the cash envelope method for budgeting, it only seemed right to get the Christmas money in cash and put it in an envelope for easy access when I wanted to purchase Christmas gifts throughout the year.
It took us a couple of years to realize that this really wasn't working out. Having the cash on hand made it too easy for me to "take a little out" here and there if I needed some extra money for something. This invariably meant that we would end up not having the money in hand at the end of the year when it came time to do the bulk of our Christmas shopping. Then we would seriously go over budget.
When we reworked the budget at the beginning of this year, we decided to hide the Christmas money away in our savings account all year. If I saw something that I wanted to purchase for a gift, I could take a little out for it.
Since we are a work in progress where budgeting is concerned and each year we learn a bit more, we also realized that just budgeting for our family's gifts wasn't cutting it either. What about a budget for gifts for my husband and I, a Christmas tree, shoe boxes for Operation Christmas Child, and any charitable giving around the holidays?
Those all needed to be added to the Christmas budget as well.
To decide how much to put aside for the year, we divided it into these categories.
1)Gifts for 16 family members.
2)Gifts for my husband and I.
3)Operation Christmas Child shoe boxes.
We decided on a reasonable amount for each category and added it all together. Then I divided the total by 12 and that is the amount we put in our Christmas budget each month.
This year, we saved $35 a month and that should cover everything. Obviously, we are not extravagant spenders! And neither do we have children which would change our priorities considerably. Every family's priorities will be a bit different. And if your total amount comes to more than you can save each month, consider where you can cut back or get more creative!
My gift budget for family members is $5 a person. I am determined to really stick with it this year. Sometimes I'll spend only $2 on a person then I can spend a bit more on someone else. I do this by making gifts and watching for sales. We do not give large gifts. It helps that our families tend towards smaller and more useful gifts.
We don't give many gifts to friends. I often make kitchen gifts that come mostly out of my regular grocery budget if we want to give gifts to coworkers,friends and neighbors.
As for charitable giving, we like to choose 2 organizations each year-one local and one international. It's hard to choose only two as there are so many good ones! Unless God leads us to give otherwise, two seems to be the right number for us right now.
Putting the Christmas money in our savings account this year has worked wonderfully! Last week when I needed to buy stuff for our shoe boxes, it was so nice to get the predetermined amount of money out and have those perimeters to work within.
Now some of you are thinking that this will not help you for this year. You've had so many other things come up and saving for Christmas was the last thing on your mind. I don't have any quick fixes for you other than reducing your monthly household budget if you can and using what you save for some Christmas gifts. Money Saving Mom has a great list of ways to make a little extra money, if you need it. I would also advise you to keep it simple and make at least some of your gifts. Look for ways to make the Christmas season special without spending a lot of money. Also, purpose to spend only cash! That way, come January, you'll be ready to start saving for next Christmas instead of paying for the previous one.
Dave Ramsey says that Christmas is not an emergency since it always comes at the same time each year. Treating Christmas as a monthly expense by saving all year definitely works for me!