Tutorial: How to Budget for Christmas Shopping | MoneyStrands

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. #amiright? ?

Read on and I’ll walk you through the steps you need to take so you can budget easily for Christmas shopping.

Let’s get started!


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.

So please, please, puh-leeze:

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)
  • Doctor
  • (…)

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. So have we got that straight? ?

Now, here’s a very cool idea from the Huffington Post. 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 Doctor (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
  • Doctor: 2 x $43 = $86

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


Step #3. Now it’s time to put that budget to work


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.

If you need some help with putting your budget to work, MoneyStrands’ got you. The only thing you need to do is to enter your budget into the app, and it will automatically track your spending throughout the month.

See this? Easy-peasy!

How To create a budget with MoneyStrands

A final note


Now that you have a plan in place to spend wisely, it’s time to focus on what’s the most valuable: spending quality time with family and friends. Sharing an evening of laughter together is a memory that will outlast any material gift.

Happy Holidays on behalf the MoneyStrands Team!



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