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Budgeting Tips to Control Holiday Spending


‘Tis the season to show appreciation to loved ones. For some, including me, that includes gift giving.

How I budget for the holidays

Each year, I seem to change up how I budget for the holidays. I used to put aside money just for the holidays. I found that some years that account had more money in it at the end of the year than necessary. I also didn’t have a clear spending plan for the funds.

Currently, I set aside money out of my October, November and December budgets for holiday spending. October’s money will be for holiday travel, November’s allocation is for gift shopping, and December’s budgeted funds are for overspend and after-Christmas shopping.

My personal gift giving philosophy

Growing up, I had the privilege of having a lot of loving family members around me. At one point, I lived with an uncle and aunt and their children. We didn’t have much in the way of material possessions, but we had lots of love in that home.

Around the holidays, we would decorate the tree with ornaments and the staircase with garland. It felt warm and cozy. We looked forward to gifts, but we knew ahead of time that we would receive three gifts each. But guess what? We appreciated those three gifts because they were thoughtful, intentional and just what we needed and/or wanted.

My gift giving budget

I still live by the philosophy to give gifts that are intentional and thoughtful. Whether it’s birthdays or celebrations, we don’t give a lot of gifts, mainly because our needs are already so well taken care of.

Every once in a while, I need to purchase a big-ticket item for one of my children, like a new computer or iPad, and that of course will serve as their one and only gift. And for the most part, I still stick to 3-5 gifts for each of my children during the holidays. I don’t necessarily set a budget because, at their age, the items they request are relatively inexpensive ($20-$50).

That’s right in line with a new survey commissioned by Personal Capital, in which 60% of respondents plan to spend less this holiday than last year and intend to spend around $500 on average.

I always give a gift of appreciation to my parents and godparents. They’ve poured so much into me and sacrificed so much to raise me, that I consider it an honor to give them something sentimental and meaningful.

Where I plan to shop

I have come to love online shopping! The day after Thanksgiving used to be a day when I would rise early to stand in line and purchase that one must-have item that was heavily discounted.

Now, I can easily purchase those items from home while still getting to enjoy my family during the holidays. According to the recent Personal Capital survey, 63% of respondents plan to shop online this year.  About 30% of the 2,200 respondents plan to use “buy now, pay later” and “pay in installments” options.

The most special gift

Spending time with my family is my most special gift. I love when we can all get together, laugh, drink hot chocolate, eat homemade meals made with love, and reconnect. Travel is involved because we are spread across the United States. I do factor that into my November budget and December budgets. I also typically contribute monetarily to the host cooking the meal.

Overall, I thoughtfully consider what I’d like to give friends and family and then allocate the funds over the last few months of the year. That seems to work well for me now, but I’m always finding new ways to budget!

The Bottom Line

Holiday spending is just one small piece of your overall financial plan.

To get yourself on the right track, I recommend signing up for the Personal Capital Dashboard. I used these free and secure financial tools as a single mom who reached a $750K net worth in four years.

You can use them to see all of your accounts in one place, analyze your spending, and plan for long-term financial goals.

Get Started with Personal Capital’s Free Financial Tools


Featured individual is a paid spokesperson and not a client of Personal Capital Advisors Corporation (“PCAC”) and does not make any endorsements or recommendations about securities offerings or investment strategy. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

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