Q. Once again, I spent way over my Christmas budget. How can I prevent that from happening next year?

The financial hangover left by Christmas spending is all too familiar. Every year you resolve to stick to your holiday budget and every year you find yourself caught up in a marathon of spontaneous and extravagant gift-buying.

It’s hard to avoid the allure of all the glitter that’s on display during the holiday season. And, check out all those bargains, too!

Related: Do budgets allow for overspending?

Now, as the bills start arriving in the mail, you will have a good idea of what you spent this year. Analyzing what you’ve spent and where will put you in a good position for next year. In addition to the gifts you bought, notice your other spending too. Often overlooked when you prepare your holiday budget is the new outfit for the New Year’s party, greeting cards and wrapping, postage, hostess gifts and all the extra food and beverages you buy for entertaining.

Help! I Overspent the Christmas Budget

In the “olden” days, many department stores promoted “Christmas Club Accounts” in which you made regular deposits to build up your holiday savings throughout the year. The disadvantage is you had to spend the money at that store, but the overall idea is a sound one.

Once you’ve drawn up your gift list and all the other holiday related costs that are likely to crop up, simply divide up the total into monthly or biweekly payments to deposit into your “Holiday Fund” for next year.

Related: Budgeting for irregular expenses

OK, that’s the easy part. More difficult is scrutinizing what you’re buying, who you are buying for, and how much you are paying.

If your family has been growing exponentially every year, you might want to sit down with them to discuss future gift buying. You may find that they are also feeling the pinch and are grateful that you are bringing it up. Ask your family what makes the holidays great for them. You could revisit old family traditions – or start some new ones.

For gift giving you may decide to:

  • draw names – a single person or family – and buy only for them
  • just buy gifts for the kids/grandkids
  • consider having an agreed upon spending cap
  • set a limit on how many gifts each person gets

This means putting in a bit more thought and creativity into the gifts you buy.

Look at your gift list. Do you really need to buy a gift for the mail carrier, your supervisor, each of your children’s teachers and coaches, the bus driver and parking lot attendant?

No one likes to show up empty handed, but are you buying lavish gifts to impress people you don’t even know that well?

Are you the one that just has to buy the IN toy that your child is begging for and end up paying paid double the retail price (and up to ten times) for the year’s fad from an on-line reseller (Hatchimal, anyone?)?

Next year you can stick to your Christmas budget and avoid getting caught in a whirlwind of impulse buys. Procrastinators tend to spend a lot more than early birds.

  • Shop year round and you’ll have more opportunities to get great bargains.
  • Create a pile of affordable, last-minute gifts to keep on hand
  • Put your gift cards and rewards points to work.

I’ll bet you’re counting down the days till next Christmas already!


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