If we talking about the Christmas budget may you know Americans spent $730.2 billion on Christmas last year? That’s a lot of photo cards, personalized stockings, candy canes, Christmas music, Santa hats, and sparkly ornaments. But unless you plan on skipping Christmas this year, you’ll find yourself a part of that $730.2 billion machines too.
To enjoy the gift-giving season without any guilt-ridden overspending, you’ve got to set up a Christmas budget, save up the money in your Christmas fund and then stick to your plans. Once you’ve got your plan set, you can shop, spend and enjoy the season without feeling ashamed for going overboard.
What Is a Zero-Based Christmas Budget?
First things first. Before we can dive in, you need a little background on zero-based budgets. It’s pretty simple: Your income minus expenses equals zero.
In other words, if you earn $3,000 a month, you want every dollar you spend, save, give or invest to add up to $3,000 too. That way you know where every one of your hard-earned dollars is going.
Without a budget, you might look up one day and find you have no money and no clue about where it even went. That’s why having a zero-based budget is so important all year long, especially when you’re trying to keep your Christmas spending from going off the rails.
How to Make a Zero-Based Christmas Budget?
How to make a zero-based budget?
- Total your income. Add up everything you have coming in, including job earnings, child support, pension, etc.
- Track your spending. Write down how much you’ve shelled out for bills (housing, utilities, etc.), debts (credit cards, student loans), savings (retirement, emergencies), and any other expenditures. Don’t forget about holiday gifts and other expenses that are often overlooked.
- Evaluate your spending. Do a thorough examination of where your money has been going. You might be shocked to see how much you spend eating out or getting takeout compared with how much you save. Think about your needs, your wants, your goals, and how you can best direct your resources. “If your expenses are higher than your income, you have to make some choices because that is not sustainable long-term,” Red says.
- Categorize and reprioritize spending. Once you’ve examined your income and spending patterns, create your budget categories, and determine how much of your income will go to each category. Remember: You’re not done with the budget until every dollar has a designated purpose.
How to Set Up Your Christmas Spending Budget in EveryDollar?
1. Plan how much you’ll spend this year.
Americans plan to spend $997.79 on holiday spending this year.
First of all, you should never feel pressured to spend that much! You should spend what you’re comfortable with based on what you make, what you’ve saved, and what you can move around in your budget to get the job done. So, crunch some numbers and see how much you’ve got to play around with this year.
2. Create a Christmas budget category in EveryDollar.
Sign in to your EveryDollar account, scroll down to the bottom, and you’ll see + ADD GROUP. This is how you add a new category. Name it anything you want: Santa’s Stash, Festive Finances, Merry Money, or the super straightforward name we’ve given here Christmas Gifts.
3. Add the names of everyone who need a present.
Once you’ve set up your budget category, click Add Item and type in the name of each person you have to buy for. (No, that doesn’t mean you think people are items. It’s just budget terminology, folks!) Now, go ahead and assign spending limits to each person.
4. Track your spending as you go.
Want to know how you don’t overspend? You track. Track hard. Track often. Keep up with all that spending as you go. Log in to your budget, click the word Transactions. Next, click the orange plus sign. Then, record the expense!
Or give yourself a Christmas present and upgrade your budget to the premium version of EveryDollar, an exclusive feature of Ramsey+. Then you can connect your budget to your bank account, and those transactions will just stream on over for you. All you have to do is drag and drop each purchase into the correct line item of your budget. That’s simpler than any reindeer game, and way more beneficial too.
5. Move amounts around when needed.
Oh no. You overspent on Mom by $5. What will you do? It has to come from somewhere. You can lower Dad’s line (sorry, Dad!) by $5 and use it to up Mom’s line.
Or maybe that graphic tee with the flight pun on it for your airplane-loving BFF is on sale and now you have an extra $15 for someone else! Move that money over to your spouse so you can afford to get them that upgrade to a year of ad-free music streaming.
Yes, you can change up the planned amounts after you put them in there. And you should. When you shop, move the money around as needed! Just make sure you don’t overspend the total amount you set for the entire Christmas Gifts category.
Budget early for next Christmas.
Here’s a quick shout-out to planning early do it! Put a sinking fund in your budget as soon as January to start stashing away cash for next year’s Christmas. If you do it little by little, month by month, coming up with Christmas money won’t hit you like the reindeer that ran over grandma in that song that’s now stuck in your head.
Get into your EveryDollar account and follow these steps to set up your budget so you can have a holly, jolly, well-budgeted, debt-free Christmas this year!
Save Money Through the Year With a Christmas Fund
We’ve talked a lot about your Christmas budget, but now it’s time to talk about a Christmas fund (yep they’re two different things). Think of a Christmas fund like a savings account that you set up for all your Christmas needs. This is where you’ll stash the money you’re saving for Christmas and watch it grow as the season gets closer.
For your total Christmas fund goal this year, take a look at how much you spent on Christmas gifts last year. Where did you overspend? Do you need to up your budget or lower it a smidge? Where can you cut back this year? Set a goal amount for your Christmas fund and use your Christmas budget to help you get there! You’ll be amazed by how quickly you can pile up a stash of cash when you make a point to save.
How to Set Up a Christmas Fund?
It’s easy to create your Christmas fund! All you have to do is log in to EveryDollar from a computer and insert a budget line item for your Christmas fund. Next, click the “Make This a Fund” feature. Now you can start entering how much you’ve saved so far, the amount you plan to save each month, and your long-term goal!
Once you’ve figured out the total you want to spend for Christmas, divide it by the number of months or weeks left until Christmas. Let’s say your budget is $1,000 and you’re just getting started now. That means you’ll need to save $500 a month over these next two months. EveryDollar will track how much you’re saving and how much more you need to save to meet your goal. In December, your Christmas savings will be fully funded, and you can savor the season instead of feeling pinched for extra money.
And here’s a quick shout-out to budgeting early for next Christmas do it! Seriously. The best thing you can do is save all year long instead of trying to cram it in the last two months before Christmas hits. Put a sinking fund in your budget as soon as January to start stashing away cash for next year’s Christmas. That $1,000 will be a lot easier to bite off when you’re stashing away $83 a month. If you do it little by little, month by month, coming up with Christmas money won’t hit you like grandma getting knocked out by a reindeer in that crazy song.
Do a Christmas Budget Inventory?
It’s time to do some digging into your Christmas budget. If you really want to find extra cash for Christmas this year, do a budget inventory. That means you need to ask yourself questions to see where your spending stands now so you’ll know how to reach your Christmas budget goal this year.
What Budget Lines Can You Tweak?
Little splurges here and there, spa days, a new album on iTunes look through your normal budget and figure out what can get trimmed down, freeing up gift money for your Christmas budget.
Don’t know where to start? Try buying generic at the grocery store, using coupon apps, drinking homemade coffee, or carpooling to work. Don’t forget scaling back on things like restaurants, clothing, personal spending, gourmet hot cocoa, and entertainment too.
“Oh no!” you say. “If I trim back on entertainment, my family can’t go see the Christmas lights this year!” Oh, heck yes, they can. Drive to a neighborhood that goes all out and enjoy that free experience. BYOHC (bring your own hot cocoa) and make a cheap but valuable memory.
How Can You Boost Your Income?
If you need some more money to hit your Christmas budget goal, get out there and up your income. Bring in some extra cash for a couple of weeks to boost your spending power. You could sell baked goods, take on extra hours at work, or even start a side hustle. Make some money quick by selling things on Facebook Marketplace, Decluttr, and OfferUp, or try cashing out rewards from moneymaking apps like Ibotta and Receipt Hog. Get creative: Babysit so parents can go Christmas shopping alone, shovel driveways and sidewalks full of snow, offer gift-wrapping services . . . the sky’s the limit.
What Christmas Traditions Can You Skip?
Psst, guess what? You don’t have to do Elf on the Shelf this year. Or fancy Christmas card photo sessions. Or a Tim Taylor-style Christmas lights display. The kids will survive, we promise. You can save money this year by editing out traditions that you don’t truly have to do. Be open and honest with your budget and your family as you try to figure out which traditions to cut and which to keep.
How Can You Cut Down on the Cost of Gifts?
Shop sales. Use coupons. Opt for DIY homemade gifts instead of buying gifts at the store. Give out baked goods for gifts. Skip all the random gift exchanges. Instead of presents for every extended family member, just draw names and buy only one gift for the person you get. So, breathe a big, fresh sigh of relief. You can still save serious cash on presents this year without being a Grinch.
Will Making a Christmas Budget Really Save Money?
Yes! You’ll find your Christmas shopping experience is much merrier and brighter when you can check everyone off while sticking to your budget, instead of spending first and worrying about the fallout later. Having a budget is the quickest way to make your money goals a reality. Saving for Christmas? You need a budget. Trying to get out of debt? You need a budget. Saving for retirement? You need a budget. Already a millionaire? Guess what you still need a budget.
Saving money for Christmas with your budget doesn’t have to be complicated. With our free budgeting tool, EveryDollar, you can create Christmas funds and track gift buying for everyone on your list.
And if you want even more insight into your budget plan, get the snazzy premium version of EveryDollar for yourself this Christmas with a membership to Ramsey+. With this upgraded version, you’ll connect your budget to your bank account, and those transactions will just stream on over for you. All you have to do is drag and drop each purchase into your budget. That’s simpler than any reindeer game (and a lot more helpful too). Follow these steps to set up your budget so you can have a holly, jolly, well-budgeted, debt-free Christmas and enjoy giving again!