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Posted by on Nov 8, 2012 in Guest Posts | 0 comments

Holiday Budgeting

Over the next few holiday months, many of us on average, will spend more money than any other time of year.  Do you have a plan?  Would you like to save money while you spend money on holiday gifts, dinners and travel?

The first step to save money and stay motivated doing so this busy Holiday Season, is to create a holiday budget.  And if budgets sound overwhelming to you, here’s a few reasons why it’s worth your time.

Save Money

It’s true.  If you don’t know how much money you have to spend, you don’t know how much money you need to save.  True motivation in savings comes from knowing your financial limits.  Setting a detailed budget creates those limits to motivate us to save money where we can.

No Credit Card Shock in January

If you start this Holiday Season without a budget, you may find yourself in credit card shock in January when your bill arrives.  It’s characterized by nervous anticipation as you check your bank account to see if you have sufficient funds to cover your holiday expenses.  This is never fun and it will rob you of the joy of giving.

Your Family Will Thank You

How many of your friends and family would want you to spend money on a gift for them with money you didn’t have?  None?  Setting a budget gets you right where you need to be with your financial goals this Holiday Season.  You’ll find joy in spending and joy in knowing that you haven’t stretched your family finances beyond their limits.  Your friends and family will thank you, too.

Have I convinced you to spend a few moments today to create your holiday budget?

With a few easy steps you can keep your finances in order and your purchases simple so that the real meanings and moments are found and cherished during and after the Holiday Season.  By following these simple steps I hope at the end of December you’ll still be enjoying the moments of giving instead of dreading the credit card bill.  Come January, you’ll thank me.

Before you buy one gift you need to know how much you can spend this Holiday Season.  (If you’re like me, you’ve already bought a few gifts. It’s not too late, just start where you’re at.)  It is essential that you create a holiday budget.  The stores are bright with sales and very easily you can spend too much money, saving money!

Here’s how to create a financial plan:

1. Find your total spending amount.

Sit down and look at your bank accountWrite the total amount you have to spend on groceries, gifts and travel this Holiday Season.  Discuss your finances with your spouse (if applicable) to make sure you’re on the same page. Don’t make a list of items you want to buy until you have this total number.  Trust me, making a list before you know how much money you can spend creates unrealistic expectations and results in overspending.

2. Divide and allocate a specific amount from that total number (from step 1) into basic and broad designated categories.

Examples: 
Groceries
Gifts
Travel

3. Divide your categories (from step 2) into sub-categories and allocate a specific amount from the category into your sub-categories.

Examples:
Groceries
- Thanksgiving Dinner
- Christmas Dinner

Gifts- Spouse
- Kid #1
- Kid #2

Travel
- Mileage
- Meals on the Road

4. Track your spending.

After your budget is complete, don’t forget to use it!  Keep it with you and enter all expenses into the appropriate sub-category.  Looks for sales and deals to keep items under budget.

That’s it!  You’ve made the first step towards keeping your finances in check this Holiday Season.

To help you keep it simple, I’ve created a free Budget outline for you to print and use.

Click Here for a Printable Holiday Budget Template

Guest blogger Lynette Rice is a Savings.com DealPro and founder of Cleverly Simple, a website helping others learn how to save money and do so by keeping it simple.

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