3 Steps to Create a Holiday Budget and Stick to It This Holiday Season

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Many shoppers will go into the 2012 holiday season with great intentions of creating a budget and sticking to it. However, by the time January rolls around the majority of those same consumers will find themselves dug into an unpleasant trench of holiday debt that can be difficult to climb out of.

If you’ve found your self in this place in previous years, don’t fear! There are some simple steps that you can take to be successful at staying in the black this year.

I shared these steps on Good Day Colorado this week:


Step One: Create a Base Holiday Budget

The first step toward holiday savings is creating a realistic budget. Start by making a list of all of the areas that you expect to spend in this holiday season. This list should include items like:

-Holiday Entertaining

Once your categories have been identified, select a total budget number and then allocate it to each of the sections. That will look something like this:

-Gifts: $500
-Holiday Entertaining: $200
-Travel: $1,000
-Decorations: $50
-Baking: $50

Total Base Holiday Budget: $1,800

The final “to-do” for step one is the most important and it is to verify that your total budget number is one that you are comfortable with and can afford. Adjust the dollar amounts in your categories until your total budget number is where it needs to be. Sometimes this might require sacrifice in one of your spending areas. Maybe you forgo the new decorations this year or perhaps you consider giving some homemade Christmas gifts to cut back on the gifts category.

Step Two: Detail Your Holiday Budget

After a base holiday budget is developed; it is time to add some color to each of the categories. This will involve creating a gift list and setting a budget for each individual item. Here is an example:

Max: $100 -Gift Card
Taylor: $100 -New Clothes
Susie: $100 -Dolls, Coloring Toys
Mom: $50 -Kitchen Towels, New Shoes
Dad: $50 -Gift Card
Sally: $50 -Candles, Slippers
Billy: $50 -Speakers

You’ll also want to add some detail to each of your other categories. Consider how much you’ll be spending on airfare, your Christmas meal, lights for the tree and anything else that will be making up the detail of your budget.

Step Three: Stick to Your Budget By Getting Deals

After your holiday budget has been developed and detailed you’ll now be ready for what I consider the fun part: getting in on the deals. Online retailers and brick and mortar stores are already starting to roll out some of the best bargains that we’ve seen all year. Grocery stores are releasing baking deals earlier than ever and there have already been several major airlines to promote winter travel sales.

Use your detailed budget as a guide to navigating these sales. It will prevent you from spending on unnecessary gadgets and the tempting sales items lining the isles of the stores and adorning the front page of the sale ads. A deal is only a good buy if it is included in your budget. Once the right bargain comes around for something that is included in your budget you’ll be prepared to take advantage of the deal with a clear conscious.

In addition to helping you save money during the 2012 shopping season, having a clearly defined budget and plan will also help make the holidays less stressful and more enjoyable!

What are you doing this year to make sure you don’t overspend on the holidays?


  1. Robin says

    I have to take money from my regular household budget and set it aside for the Holidays. To do this I take my savings and any money left at the end of the month for Aug-Oct and put them onto a gift card to the store where I shop the most, Super Walmart or even King Soopers. Then when it is time to do my gift purchasing I use the cards if I can or trade the cards for cash in the regular budget and buy items. I always start with a preset amount to spend too.

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