It’s only been a month, yet the Christmas holiday is probably just a distant memory. It may be a bit of a stretch to think about next December, but right now you can take a few moments and make a big impact on next year’s Christmas celebration, and especially on budgeting for the spending.
The receipts and bills should still be either fresh in your mind or easily found at this point, so now is a good time to get started on next year’s budget.
So open a spreadsheet program or take out a notebook and pencil. We’re going to look at your 2011 Christmas spending. If you celebrate any other holidays and/or New Year’s Eve, include those also. This will give a December total extra spending amount.
Start with the most obvious: the gifts.
Write down all the names of the people that you bought a gift for and note how much you spent. Try to keep the emotions out for right now. Don’t judge or feel good/bad about how much you did or did not spend, nor compare the amount of spending by person. Just record it all. Include hostess gifts, office gifts, and any and all other gifts.
Now, make a note of all the holiday decorations.
Next, all of the wrapping paper, bows, ribbons, bags for your gifts.
The next line is for the Christmas cards, letters, envelopes, and postage.
Next, all of the food spending – the dinners out, the cookie and candy ingredients, and the special meals at home, the extra bottle of wine or eggnog.
Now, list all of the extra gas and transportation costs – gasoline, air fare, hotels, including mileage to/from parties, mileage for shopping, and anything related to holiday celebrations.
Next in line is the holiday clothing – the party dresses, pants, shirts, jackets, purses, shoes, jewelry, makeup, and anything else spent for the purpose of a special look for the holidays.
December holidays make us feel generous, so add in all the extra donations that you made in December – don’t forget the canned goods you bought for the food bank and the bills you dropped in the Salvation Army red kettle.
Finally, add in anything else that you spent just because it was the holidays: music, books, gadgets, and anything else that did not fit in a category above.
Feeling a little overwhelmed yet? I know that just making this list was an awakening for me. We tend to think of our holiday budget as simply gift-giving, yet a large portion of our spending evaporates into items that we don’t consciously classify as part of our Christmas budget.
Now that you’ve recorded everything, total it all up. The number may be much larger than you expected.
In the American Research Group, Inc.’s Planned Christmas spending survey, Americans reported that on average they had planned to spend $646.00 on Christmas gifts for 2011. If this figure is accurate, then many of us will find that once we add in all the holiday clothing, food, travel, decorations, wrapping paper, music, parties, donations, and entertainment … we could easily find that our spending was over $1000.00.
Spending this much money is not quite the issue. The first issue is whether you spent money that you really did not have. If you had to use credit cards or raid emergency savings funds for your holiday spending, then you were buying things that you could not afford.
The second issue is whether the money you spent was well spent or pretty much wasted. Did you really enjoy the party that cost you $125.00 in new clothing, gas, and hostess gifts? And if you did enjoy it, was a new dress really necessary? What are the kids doing now, a mere 30 days later, with the presents you gave them? Were the holiday meals and parties worth the amount that you spent? Did everyone eat the 15 fruitcakes that you baked, and further, did you enjoy baking them?
Go over each line of spending and make detailed notes to yourself. It’s easy to forget things from a year ago and by the time next December arrives, you may not remember that everyone at your Christmas party devoured all the homemade brownies and hardly touched the expensive little appetizers that you paid dearly for at the gourmet shop. You might also not remember that you forgot sweet Aunt Mable’s gift and had to pay a premium to have it express shipped so it would arrive in time for her visit. Write down everything that you can remember now that could possibly help you next holiday season.
Analyze it now, and prepare for it next year with a combination of a crisp, well-planned budget and a savings plan to fund it. Plan next year’s spending by using the figures you just totaled, adjusting up or down as appropriate. Give yourself a few extra dollars for unexpected spending. Now start to save right now to fund that budget. Putting aside $100.00 each month starting now (January) will have $1000.00 available by next November when you are ready to start the holiday shopping. Check with your bank to see if they have Christmas Club accounts; they often pay a slightly higher interest rate.
If you find that you really cannot set aside an extra $100.00 (or whatever figure you arrived at) each month, then you are already forewarned that you will need to either earn some extra money, or cut back on spending next year.
Either way, by planning in advance and doing your best with the plan, you are now taking control of your holiday spending. That’s a big first step toward mastering the skill of having control over all of your finances. And that’s the Fat Dollar way!
Patti
