Did you end up with a credit card bill shock last January because you didn’t budget your Christmas gifts? Right now, budgeting for Christmas might seem far off, but now is the time of year to start thinking about your budget for Christmas. We don’t want the same surprises as last year, so we will fix that this year. Budgeting for Christmas doesn’t need to be as hard as it can feel, so here is how to start your Christmas budget.

Isn’t it a Little Early For A Christmas Budget?

Yes, if you are an ordinary person, it is. But the whole point of getting better with your money is not to be normal like everyone else is with money.

Here’s the deal…

As of today, there are just under 100 days left until Christmas (in case you didn’t know, they have scheduled another Christmas this year… shocking! I know, right!?!).

That means in the next 100 days; we will panic and go crazy about how much we need to do and shop for in a short time.

In doing that, we will pay more than we need to. Buy things on impulse, and be all-around foolish in our seasonal shopping (it’s ok we all do it). Plus, it turns us into these huge freakin’ balls of stress.

NOT THIS YEAR. NOT THIS TIME. WE ARE BETTER THAN THIS!

Let’s Avoid the Christmas Budget Shock This Year and Start Saving Now

Instead of getting to December, and realizing that you haven’t saved enough for Christmas this year, let’s try something new. Let’s get set up for a successful Christmas.

It doesn’t take long to do.

Here’s what you need (pick one of the three options):

1) How much did you spend on Christmas last year.

2) A list of everyone you are shopping for this year.

3) How much do you want to spend on Christmas gifts this year? 

Method 1: How Much Did You Spend on Christmas Last Year?

Step 1: Find Last Years Grand Total for Christmas Spending

If your Christmas shopping is pretty much the same from year to year, then this is an easy way to go. Go back into Mint or Tiller (my favorite go-to for budgeting) and figure out how much you spent on Christmas.

Let’s say you spent $1000 in total on Christmas-related shopping and activities last year.

Step 2: Take That Amount and Divide it by the Days you Have Left Before Christmas.

If you spent $1000 and have roughly 100 days left until Christmas, then you can figure out how much you need to be saving every day to avoid the dreaded January bill shock.

$1000/100 = $10 a day means you need to save $70 a week

Step 3: Automate That Amount into a Separate Account.

In our example, you need to be saving $10 a day to make sure you have enough to cover this year’s festivities (assuming everything stays the same).

Set up an automatic transfer to a separate savings account for that amount. For example, we use Wealthsimple’s Smart Saving account (get a $50 bonus for getting started saving with Wealthsimple); it has a high-interest rate, no fees, and unlimited transfers to your bank account.

Set up a weekly transfer and let it run. This will make your holiday season a little more festive when you know money is in the bank.

One last thing…

If you have made new friends this year and need a little more money, go ahead and bump up that number. Going from $10 to $11 a day will put an extra $100 into your savings account.

Method 2: Who are you shopping for this Christmas?

Step 1: Make a List of Everyone You Need to Buy For and Total How Much You Will Spend

If you are super organized, you may have last year’s gift list still kicking around.

(Hint: if you put it in Excel or Word, it’s there for you every year).

If not, brainstorm a list of everyone you need to buy a gift for this year.

If you are like a lot of families, you probably set a limit on how much you want to spend on each person. It’s an easy conversation to have with those you feel close to.

Step 2: Assign a Dollar Value to Each Person

It’s a good idea to have a budget amount ready for each person. If you spend $50 on your spouse and $100 on your child, write it down. Once you have done that for everyone, add it up and come to a total

Step3: Take That Amount and Divide it by the Days you Have Left.

If you spent $1000 and have roughly 100 days left until Christmas, you can figure out how much you need to save every day to avoid the dreaded January bill shock. 

$1000/100 = $10 a day needs to be saved.

Step 4: Automate That Amount into a Separate Savings Account.

Just like in our last example, you will need to automate your savings for your Christmas budget amount to start transferring money, so you have it available when you need it.

We use a Wealthsimple Save account; it has a high-interest rate, no fees, and unlimited transfers to your bank account.

Set up a weekly transfer and let it run. This will make your holiday season a little more festive when you know there is money in the bank.

Method 3: How Much Do You Want to Spend On Your Christmas Budget?

Step 1: Decide on How Much You Want to Spend On Christmas

This is probably my favorite one. It’s really easy to pick the maximum amount that you want to spend on Christmas this year. For round numbers, let’s say it’s $1000 (again).

Step 2: Decide on who you need to buy gifts for.

Next,  you will pick out how many people you need to buy gifts for. So for us, it might look like this:

Husband, Wife,  Son, Daughter, Parents, 3 Nephews and Nieces, Secret Santa at work, etc…

Step 3: Assign a dollar value to each person

Assigning a dollar value is pretty easy; go through the list and add a value to each person.

• Husband: $100
• Wife: $100
• Son: $100
• Daughter: $100
• Mom: $50
• Dad: $50
• Mom-in-law: $50
• Dad-in-law: $50
• Niece #1: $50
• Nephew: $50
• Niece #2: $50
• 2 Work Secret Santas: $50

Step 4: Total up the Amounts in your Budget and Make Adjustments

We like to keep things even among everyone outside of our immediate family. So If the $50 budget we set is too high, we revise it down by $5 or $10 dollars. If there is leftover, we decide on where to boost it or to just leave it as it is in case we need the money for other things over the holidays.

Looking at this budget, we have $200 still available to us; we will have to decide what we are doing with this amount or just leave it as is.

Step 5: Automate the Savings For Your Christmas Budget

Just like in our last two examples, you will need to automate your savings for your Christmas budget amount to start transferring money so you have it available when you need it.

We use Wealthsimple’s Save account, it has a high-interest rate, no fees, and unlimited transfers to your bank account.

Set up a weekly transfer and let it run. This will make your holiday season a little more festive when you know there is money in the bank.

Finally… Budgeting = freedom

Budgeting gives you freedom. It doesn’t feel like it at first, but the more you do it, the more relaxed you get about money.

Take a few minutes now and get everything set up to help pay your bills in January when they come around.

Most of the stress around the holidays comes from not planning things out. This quick little process will save you stress, and financial headaches and may get you started (and finished) your shopping long before you usually start your shopping.

I know it’s early, but that’s how we work here. Think in advance, plan for it, and execute the plan.

Now, if you’ll excuse me, I’m going to set up an automatic transfer for my holiday spending.

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