If you are like me, you are completely blindsided by the end of the year. Wasn’t it just the 4th of July? Why is it so cold all of a sudden!?

December is here, and it’s human nature to get stressed out by the holidays, the shopping, the parties, the travel… and put thinking about your finances on hold.

How to Budget for Christmas Shopping

Step #1. Determine your total budget

First, decide how much you are going to spend.

According to a survey done by T. Rowe Price, 64 percent of American parents admit to spending too much over the holidays. And more than half of them say they never stick to their spending budget.

Don’t let this be you, and decide how much exactly you feel comfortable spending this season. Know all your fixed expenses so that you can determine your disposable income (bear in mind that saving AND investing are also considered fixed expenses!).

Step #2. Make a list of people and check it twice

Make a list of EVERYONE for whom you will buy gifts. It may look something like this:

  • Mom and Dad
  • Brother and Sister-in-law
  • Boyfriend
  • Friend
  • Coworker(s)
  • Teachers
  • (…)

When you’ve made this list – prioritize.  Who do you absolutely *want* to buy gifts for?

Listen: It’s easy to head out shopping then see the perfect gift for your friend’s neighbor’s friend that you met once at a potluck years ago. It’s nice of you to think of him but that gift either comes out of your gift budget or it will hit your credit card.

Now, here’s a very cool we found online. Assign a point value of 1 to 5 to each person based upon a comparative amount you would like to spend on them. Then total all the points, divide the total amount you plan to spend by the total points, and go back through the list of people and multiply the Christmas budget factor by their point value.

Sounds confusing? It’s not. Check out this example:

If your budget total is $1,000, and your distribution is Mom and Dad (5 pts.), Brother and Sister-in-law (5 pts.), Boyfriend (5 pts.), Friend (3 pts.), Coworker (3 pts.) and Teachers (2 pts.), your total points is 23 and your Christmas budget factor is 43 ($1000/23 = 43).

Hence, if you multiply each person’s point value by that amount the result is:

  • Mom and Dad: 5 x $43 = $215
  • Brother and Sister-in-law: 5 x $43 = $215
  • Boyfriend: 5 x $43 = $215
  • Friend: 3 x $43 = $129
  • Coworker(s): 3 x $43 = $129
  • Teachers: 2 x $43 = $86

And voilà! Now, you know how much you can spend on each person.

Step #3. Stick to your budget and track it!

After determining how much you’ll spend in total, and how much you can afford to spend on each person on your list, it’s now time to get down to the nitty-gritty: what you’ll buy. When those receipts start coming in and expenses hit your account, track them!

Try using the money manager inside online banking. It’s a free tool to help you set goals, budgets and categorize spending.

Log into Online Banking (www.GreenCountryFCU.com) and select Money Manager. Just follow the prompts to Add a budget or Set a Savings Goal. Easy-peasy!

Choose a Goal, Money Manager

Choose a Goal, Money Manager

A final note

Maybe you got to the middle of November without saving any money for Christmas shopping – or you had to use that money to cover other expenses throughout the year. Hey, it happens. As an option, you could skip your December (or November if it’s not too late) loan payment to free up some extra cash. This option is available to all Green Country FCU members in good standing with a loan through us. Business loans and home loans do not qualify.

Apply online here, or give us a call if you’re not sure (918) 246-7888.


Skip your December loan payment