It’s one of the most expensive times of year and as we edge closer to December, the Christmas rush can take over. We’ll often find ourselves spending way more than we had planned. That’s why it’s important to prepare early and avoid budget blowouts.

Figure it out

First things first, look at your income and savings. Some people start a Christmas savings account earlier in the year which helps manage the influx of expenses come December.

If you haven’t put money aside throughout the year, it’s time to figure out what you can comfortably spend over the festive season. This figure is what you should plan your budget to.

Dig into the detail

When you start your budget, it’s important to factor in every expense. Consider these questions:

  • Are you travelling over the Christmas period?
  • Are you taking any unpaid leave over the holidays?
  • Do you have kids – have you factored in activities for them over the school holidays?
  • What food are you going to buy? How many people are you feeding?
  • Will you be buying any new Christmas decorations?
  • Are you sending Christmas cards to family and friends?
  • Will you make any donations to charities at Christmas time?
  • What are your mortgage repayments over this period of time?
  • How many gifts are you going to buy?

Bring it all together

Once you’ve identified what you’re spending your money on, it’s time to forecast how much you anticipate each item will cost and make sure that it fits in with what you can afford. If you find that your forecast is over what you have budgeted it’s time to look at areas where you can save money.

  • Can you recycle old decorations?
  • Have you looked at free e-card options instead of sending traditional Christmas cards?
  • Would you consider getting creative with gifts? Homemade gifts are often the most thoughtful.
  • Could you introduce secret santa to your family and save money?
  • If you’re hosting a big lunch or dinner, perhaps you could ask guests to bring a plate (or their own drinks) and save on catering costs.
  • What are some free activities to entertain the kids?
  • Can you pay off more of your mortgage now to reduce your repayments in December and January?

The most important thing is to set realistic goals. With less than two months until Christmas starting to plan now can be the difference between sticking within your budget and spending beyond your limits.