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7 Days of Holiday Budgeting: How to Make the Most of Every Dollar This Holiday


With the holiday season upon us, more and more people are worrying about what is about to follow: the large and sometimes unmanageable January credit card bill that comes after a season filled with gift giving, feasts, travel and other expenses. Whether you celebrate, Christmas, Hanukkah, or any another seasonal celebration, your holiday spending is probably above the norm. The holiday season doesn’t necessarily mean going into debt. By following these simple tips, you can celebrate Christmas (or whatever holiday you recognize!) on a budget.

holiday loans and christmas budgeting tips

On the First Day of Christmas, My True Love Told Me…

  1. Make a Holiday Budget
    Before starting any of your holiday gift shopping, determine what you can afford, and give yourself a budget. Your budget should be based on the number of people you need to purchase for and how much you can afford. Give yourself a range, no more than 2-5% of your annual income, to spend on Christmas gifts. With this budget, you won’t need to worry about overspending more than you can afford.

    It’s important to give yourself a Christmas budget because having no budget can lead to overspending, which eventually results in debt. Don’t forget to include other expenses in your budget, like decorations, food and travel. You’ll need to allocate the appropriate amount for each additional expense.

  2. Avoid Last Minute Shopping
    Don’t leave your holiday shopping until Christmas Eve. Shopping at the last minute encourages impulse shopping. You don’t want to buy the first thing you see because you don’t have a gift. This is not the most cost-effective way to manage your holiday budget, and it will lead to overspending. Overspending your Christmas budget will mean cutting back on other expenses you might not be able to afford. If you wait until the last minute and end up overspending, you may be stuck in a tough place when bills like rent, gas or groceries roll in the new year.

    Start your Christmas shopping early so you can spread your budget over a period of time, making it easier to stay on top of other expenses. Shopping during the offseason will guarantee lower prices, and allow you time to price match and look for deals without a time crunch. Think about purchasing decorations in January for the following year, and start picking up gifts throughout the year and hide them somewhere until the holiday season comes. This will give you more time to think about gifts, reduce pre-holiday stress, and help you stay on budget.

  3. Track Your Spending
    To help yourself stay on budget this holiday season, track all your spending. You should keep all your receipts and write a list of all the things you have already purchased: gifts, decorations, food, and so on. By tracking your spending, you can see how much of your budget you have left, and the list will help you remember what you have purchased so you don’t buy more than needed.

  4. Coupons, Coupons, Coupons
    Coupons are a shopper’s secret weapon during the holidays. Apply coupons to food and even gifts. If you’re shopping online, look for discount codes before you make a purchase. You might be surprised how often you can save a little extra money!

    Coupons are just one of the many ways to save during the holiday season. Think of other ways you can save money during the holidays, like a group gift, homemade gifts, or working with family members to purchase gifts and food in bulk; you’ll cut costs and spend some family time with loved ones over the holidays.

  5. Simplify Your Gifts
    The holiday season is not about how many gifts, or how much you spent on them, but about the spirit of giving. You don’t have to outspend friends or family for the holidays, as long as your gifts convey thoughtfulness.

    If you need to keep a strict holiday budget this holiday season, let your family and friends know that you will be purchasing smaller gifts this year and they should do the same for you. More often than not, we feel obligated to get someone a gift that is as big or expensive as they are giving us. Not everyone has the same Christmas budget, so this will take the pressure off of you, and likely your friends and family, too!

    Likewise, children do not know the difference between a brand name and non-branded toy. Don’t overspend on kids when all they care about is whether a toy is fun to play with. Purchase gifts that will get a lot of use, and don’t get hung up on brands.

  6. Pick a Payment Option
    If you are deciding how to pay for your gifts, it is all about planning ahead. Although some experts suggest you should use cash when paying for gifts to avoid debt, credit cards are acceptable as long as you have a plan for how you will pay off the bill that follows.

    Don’t think of your credit card as extra money. Remind yourself that you will be paying it off in a month. If you won’t have the money to pay off the bill in a month, don’t make the purchase. A proactive way to use credit is to put a payment on the credit card beforehand, and only spend that. This will avoid any stress in January of paying off the bill.

    If you’re worried about the temptation of a credit card, stick with cash. Cash is a good choice because you physically have to part with it, and watch it go into the teller’s hands. This makes it more challenging to spend large amounts. You can also take out however much your budget allows and limit yourself to that amount. Once all the cash is gone, then your holiday shopping is done!

  7. Cut Out Unnecessary Extras
    With the holidays come holiday parties. Whether it’s with coworkers, family or friends, it seems as if there is a Christmas party every weekend. Parties can really cut into your budget when you think about having to purchase gifts for the hosts, and the money you will be spending on gas, cabs and other related expenses. Decide which parties you must attend, and which parties you can afford to miss out on. This will reduce extra spending that is not necessary.

    Also look at what you can cut out from your home to reduce overspending. Does your house need new lights? Do you need new decorations? Or, will last year’s decoration do just fine? More likely than not, you can reuse some decorations, rolls of wrapping paper and other holiday items from previous years.

    Remember, the holidays are only a few days a year! You don’t want to start the new year off in debt because you didn’t plan ahead with a holiday budget!

If you are struggling and your holiday budget isn’t cutting it, Magical Credit specializes in short-term cash loans. If you need a little extra cash to help get you through the holidays, fill out a Magical Credit loan application today to see if you qualify for a holiday loan! We are a Toronto-based loan company that provides bad credit loans to people on government income, subsidies and pensions. You can call us at 1-877-213-2088. Let us help you make the most out of this holiday season!