Personal finance tips to help budget for Christmas

November 23, 2016

It’s nearly Christmas, which is a time to celebrate, slow down and rejoice in family environments. Everyone has worked hard throughout the year and can finally use the time during the festive season to reflect and relax. Of course, though work has probably come to a crawl or stopped entirely, many people prepare themselves to spend more these months than the rest of the year. Whether it’s buying presents or planning luxurious holidays, bank accounts take a hard knock as many feel they deserve to cash in on a year’s worth of work. But that shouldn’t mean losing out. Being smart about finances takes into account greater spending during the festive season. No one should struggle during these times if they’ve properly considered how to manage their finances. To that end, it’s worth considering some ideas and tips about budgeting and finance during the Christmas season.

Plan early

Christmas only occurs at the end of the year. That leaves plenty of time to create a budget and stick to it, taking into account the desire to spend a certain amount during the last months of the year. Before budgeting can begin, however, it’s necessary to list precisely where the money will go. Tangible presents are easier to calculate, such as toys for kids or books for parents. It’s important to remember that these can go up in price, due to inflation, or be out of a set price range due to rising living costs. However, there’s also a chance many items marked as presents could find themselves on sale.

Purchasing online means being able to trace prices, getting alerts when products are marked down and so on. Since purchasing isn’t the priority this early on, it might be wise to simply obtain information.

Budget, budget, budget

One of the key aspects of managing personal finance is having a handle on the budget. Forbes’ Laura Shin has a useful guide designed to be used by anyone.

“The point of the overall exercise is to determine what’s necessary, what your financial goals are, and what’s discretionary and the best allocation toward each of those buckets — and then to stick to those amounts.”

Knowledge is what’s central to budgeting, which is why obtaining information remains so important. Indeed, for any personal finance company, data is key to their success and delivering on their services. If it works for finance companies, it obviously will work for the average person.

If people can calculate what’s left after paying necessary expenses, they can begin focusing on luxury spending. The difficulty is sticking to the budget since it is easy to get distracted by “amazing deals” and savings from popular stores. Again, flexibility is key – so there’s no need to ignore or overlook deals that can, in the long run, save us money. As noted before, sometimes it pays to wait for discounts and sales to purchase items at a lower price. Of course, not everyone is an expert at calculations, so it makes sense to use personal finance software or experts that might aid us.

Lifehacks for shopping

When it comes to actual shopping, it can be useful to find smart ways to save. For example, it’s bad for the environment and bank accounts to keep buying bags. Keeping bags in the car or buying a large, durable container might make more sense. This might seem like only saving a small amount, but can do wonders.

Some of the most useful advice comes from the personal finance side of Reddit – a forum where anyone can submit ideas and respond. Included in some of the best Reddit advice, one user suggests creating two bank accounts (one for savings, one for spending), to help curb impulse buying. By making it harder to pay, it gives people breathing room to say no.

In the context of festive shopping, this also allows people to consider whether this is really the best gift idea. There’s little difference when people buy for themselves or others when it comes to impulse buys – and, in both instances, it’s almost always better to wait.  


People must decide whether they will focus on tangible gifts or life experiences, such as travel when it comes to holiday expenses. Most people can’t do both. Money is finite, so it must be decided well in advance whether that means it will be used as tickets to travel or toys. The festive season is meant to be a time to take advantage of the slower pace, as the world breathes a sigh of a relief after a long year. With so few businesses operating and so many travelling, however, it means tickets prices soar – putting travel well out of reach than it otherwise would be.

Speaking of priorities, it’s necessary to think about the people that are being gifted, too. As IB Times notes:

“There will always be people in life who deserve our generosity. But not everyone should be considered equally, and that’s OK. When shopping on a budget, consider who is at the top of the list and work backward. Immediate family will probably come first, followed by close friends, relatives and colleagues. Make a list of potential gifts for everyone and keep track of prices.”

In the end, what matters is the ability to manage finances in a way that allows people to live comfortably while being able to reward themselves and others at the end of the year. It’s not easy to manage finances, but it can mean a wonderful festive season if successful.

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