Christmas (Budget) in July

Yes, I’m aware that it’s already August.  The fact that I’m a month behind on this post kind of proves my point that the holidays are rapidly approaching.  At any given date during the year, you can hear someone excitedly exclaim, “There are __ shopping days until Christmas!”  This is usually followed with a laugh, but have you considered that you might want to pay attention?

According to the American Research Group, in 2013, the average American spent over $800.00 on holiday gifts. That’s a lot of dough to come up with in a short period of time. So how do you fit in against the average?  FitFin recommends the following steps to determine what you spend and to help you determine when to start budgeting for the holidays:

1. Make a list of who you’ll buy gifts for, including family, friends, co-workers, teachers, the mailman, etc. Anyone you think is deserving.
2. Estimate how much you think you might spend this year on each of those people. Note to parents: According to Investopedia, we spent an average of $271/child in 2011, and 10% of us plan to spend $500 or more on each child. Don’t be conservative, be realistic. And a note to my dad: If you’re reading this, I’ll take a new Sonos sound system for the house. Thanks!
3. Don’t just consider gifts—factor in all holiday-related items, including greeting cards, decorations, food, travel, etc.
4. Once you have an estimated number, determine how much money you can save each month.
5. Divide the total estimated spend by the monthly amount to get the number of months before Christmas.  For you engineering-types, check out this handy Christmas Calculator, which shows how many days are left until Christmas.
6. Again, be realistic. If you don’t think you can save the amount you need to by Christmas, either think about who you might cut out of the list (sorry, Uncle Fred), or spend a little less on each person. Also think about how and when you can score some deals (Black Friday insanity comes to mind).

Once you know when to start planning, figure out where you might be able to sacrifice a little bit out of your existing budget. FitFin makes it easy with our Budgets Overview page to see where your money is going.  It’s also easy to create a short-term budget for the holidays.  You could, for example, set a $800.00 budget starting today and ending on December 15th, then track any holiday purchases toward that budget.  In fact, I just did that myself–it took me about 30 seconds.  FitFin took that $800.00 and averaged it out by month based on the start/stop dates of the budget.  How cool is that?  To keep my monthly spending even, I decreased my grocery budget by $100.00 and deactivated one of my summertime budgets.  That took me about another 90 seconds.  Just two minutes, and now I’m ready for the holidays (well, at least from a budgeting standpoint).

Consider using some of these strategies and incorporating FitFin into your holiday shopping plans to help prevent a Blue Christmas (or worse yet, a January in the red). Thanks and Happy (early) Holidays from FitFin!

And if you’re keeping score at home, there are 144 days until Christmas.