One of the topics you could already be thinking about is putting together a holiday budget. Regardless of how the health crisis changed the world, holidays are here to stay. But there is no denying the fact that for most people, their finances are still far from what it was before the health crisis. So even though the holidays are here to stay, the approach could be a little bit different from years past.
It could have been a little easier in the past to put together a budget for the holidays because people were financially capable of doing so. But after the pandemic hit, it started to ripple out to several areas of life including the economy. What used to be a medical issue started to leave its mark in industries all over the world.
This left a lot of Americans out of a job and trying to survive on unemployment benefits. The U.S. Bureau of Labor Statistics shared that there were almost 17 million Americans who were unemployed at the height of the pandemic. There was a time when stimulus checks gave American families a much-needed boost to get them through hard financial times. But now that the economy is slowly picking itself back up, people are starting to feel financially confident again.
This newfound confidence could mean that it would be a bit more manageable to start preparing a holiday budget for the year. It would be challenging to spend extravagantly in light of everything that has happened but it does not mean you cannot celebrate the holidays altogether. Here are a few tips to help you do just that
Create a holiday list
As in previous years, your holiday budget starts off with a holiday list. A good place to start is to list down all your plans for the holidays. If you were invited and going to a party, list it down. Hosting a party of your own? Then you definitely need to put that on the list. If holidays for you mean visiting family and friends, then that has to be on your holiday list.
The reason why you need to put in your plans and holiday activities is that you need to figure out how much you need to spend on each. If you are going to a party you were invited to, are you bringing or cooking something? That has a cost to it. Moreso if you are going to host a party of your own. That would have several costs to it as well.
If you are traveling over the holidays, getting flights to and from needs to be done early on. Last-minute plane tickets are usually the most expensive ones to get. Even if you are only traveling by car, you need to plan everything in advance and that means advance purchasing of items you wish to bring along with you.
Holiday budget means checking what you gave the last time
Your holiday budget is basically a list of what you will be spending during the holidays. More than your travel plans and what you will buy for yourself, this also means gifts for other people. Gifts for family and friends normally fill up most of your budget for the holidays. The Christmas holiday is one of the times where it is usually better to give than receive.
A good way to start with your holiday list for gifts to family and friends is to check what you have given the past few years. If this is the very first time you are doing this then you can skip over to the next tip. But if you have given gifts in the past, then looking at your list of the previous years can help give you an idea of what you can give for this year.
If you get to see what you gave the last time, it also gives you a better idea of what to give them this year. Not only about the price range, but you can also allot a specific gift for each person. But a list from previous years helps prevent you from giving the same thing over and over again. It also saves you from having to recall all the names of people you want to give gifts to.
Do you have time to personalize your gift?
One of your main goals for your holiday budget is to try and find ways you can save money. Especially with the health crisis still looming over everyone’s finances, it is a good idea to cut down on costs. When you are trying to figure this out with your holiday gifts, one thing that you can consider is personalizing or making the gifts yourself.
This depends on what your skills and talents are which you can use to help you create gifts for family and friends. If you have a talent in the kitchen, you can explore baking or cooking for the people on your list. Rather than buying gifts, you can bake cookies or even cook and send your specialty dishes as a holiday gift.
If you are artistically inclined and love to paint, you can send them art pieces you made yourself. Your only cost would be for the art supplies you need to create your paintings. Of course, this would mean a lot not only for you but for the people who will receive the painting because it was specially made for them. There will never be another one like it.
Separate your holiday budget from your regular household budget
One of the things you need to take note of is to make sure you separate your regular budget from the one you are making just for the holidays. The most obvious reason for this is you run the risk of coming up short for your monthly expenses.
If you cross the items from your regular budget with that from your holiday list, there is a chance that it can affect your financial goals as well. It can put off your timeline and you can end having to adjust your goals because you misused the money. The holidays are supposed to give you great memories and not about pushing your goals further out.
Gift something they can use
One of the best things you can give people that matter to you are things they can actually use. They will be able to appreciate it even more. If you switch places and you are on the receiving end, wouldn’t you want to get something you can use as well? To do this, you need to know the person well enough so you get an idea of what they need.
If your friend loves to bake, it would be a great idea to gift something they can use for baking. You might have family or friends who love their pets. You could probably get them something their pets will love. If you know that younger family members will soon enter college and they have 529 plans, you can add to that fund instead.
Your holiday budget can help you enjoy the season a lot better and start the next year with your finances intact.