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5 Simple Tips to Help You Make a Budget for the Holidays

Senior Editor, TipsHire
make holidays budget

Planning the holidays budget

The holiday season is that time of the year when everyone wants to give the best gifts. This can only happen if you spend some money and this can be a little tricky for some of us.

This season of giving is basically the season of spending and this article should come in handy for helping you make a budget. We need to organize our finances in order to please others, but also ourselves.

It can become quite difficult to choose the best gift, but there are several ways to take the stress out of the holidays. Decide to make the budget for the holidays ahead of time.

You can start out no later than November, as this is a sure way to let go of stress during this time of the year.

Apart from lessening your stress, it will prevent overspending and making other debts this holiday season.

Understanding what a budget is

One way to describe it is that it represents a powerful tool. Better said, it can become one if you understand how to use it in your own best interest.

We all know that the holiday season can come with many temptations. We might be willing to spend more than we can afford just to keep that jolly vibe going on.

However, remember that what you seed now, you’ll harvest in the future. Nobody wants to borrow money now and make a lot of efforts later.

Deciding to create a budget for holidays is an essential step in the process of understanding where your money goes this holiday season. It’s also a way of improving your financial situation, even though this time of the year almost begs for more spending than usual.

So a budget can be understood as an overview of your income versus your holiday expenses. It’s a plan that anybody needs in order to be aware of how you get to spend your finances on various gifts, for instance.

In this context, a budget can help you not forsake your finances. It can give a hand in helping you achieve your money goals, even thought this time is a time of giving.

Nevertheless, it can be also a time of enough caution so that you don’t have to ‘suffer’ later on in January.

How can you make a budget plan?

There are many ways to go about how to make a budget for the holidays season. We believe that the most important idea to keep in mind is to really go to the core of what the key elements of the budgeting process are all about.

These are techniques that anybody can implement and they can do wonders. Once you get to master them, at least at a basic level, you will be able to put them into practice.

So, a stepping stone for creating a budget for the holiday season is becoming aware of your spending habits. Be honest and put on paper what you spend most money on.

Ask yourself if this really helps improve your life. If not, then that is something you need to work on.

However, this is only a small part of the simple, yet meaningful process of budgeting for the holidays. Keep on reading to learn more about our 5 simple steps.

Anyone can use them, but it’s all about having the will to do so.

Step 1: understanding your income

A first thing you need to do is to list all your income sources. Do it on a monthly basis, after taxes are paid. We recommend that you start with a monthly overview, which is easier because many bills take place once a month.

You can break it into smaller chunks afterwards.

Now, there are people who work on a regular schedule, without having any other side hustles. Such employees get paid monthly with the same amount of money, leaving aside any possible bonuses.

For them, just a look at their bank account or payslip can help them understand their monthly income.

For freelancer, on the other hand, things are different. They may have a lot of work this month, but the next can be emptier. These irregular work and payment patterns can complicate things.

A good method to look at your freelancing finances is to account for your average income over the last 6 to 12 months. It all depends on how seasonal your work is.

This step helps a lot in understanding how much money you are able to spend, knowing where they come from and in what amount.

Step 2: list all your bills

It’s very important to be aware of all the money you spend on bills. Making a list of your regularly occurring expenses for each month plays a major role in making a holiday budget.

For instance, write down how much of your income goes for rent, mortgage payment, utilities, phone bills, transport, food, fitness, and other stuff you monthly spend on.

If you have a pet, there must be a monthly amount of money that you spend for food or other health related needs. For some, clearly knowing how much money are spent for each category can be hard.

A good way to know for sure is to check your last three months of bank and credit card statements. Moreover, there are many bank apps that help with breaking down automatically your expenses by category.

Well, talk about the perks of living in these days…

Step 3: do the math!

Once you know how much money you spend on bills and other similar monthly expenses, it’s time to do some math. Just a little, don’t worry!

What you’ll need to do is to extract your income from your regularly expenses. This way, you’ll get an overview of how much money you’re left each month.

Remember: any money you’re left over with at the end of the month can be put aside for your holiday budget.

This reminder is especially important for those that have a lower income than their expenses. For those lucky ones, who are left with more after paying bills and the like, they can breathe a sigh of relief.

Step 4: readjusting expenses

If you are one of those that are left with not much at the end of the month, then it’s time for a serious readjustment. You can go check again your expenses and give up those that really don’t help you.

Maybe you can find a way to cut some of them of.

Be honest and try to understand that if you are spending more than you earn, this should be a sign. Living beyond your means is not helping on a long term and it’s definitely not helping you create a holiday budget.

Some drastic changes might be required, but it’s for a good cause, don’t you think? You deserve to have the best holidays!

Now, as you are ready to make a change, ask yourself these questions:

  • Is it enough the amount I’m saving?
  • Is more money going on things that I don’t really need, like eating out?
  • Do I intentionally spend my money?

Once you have answered these questions, make a list of all the people you want to gift these holidays. Also, you should know exactly what you will buy for each.

The most important part of this is to stick to your list. Don’t make any impulse or last-minute additions.

This can seriously put a dent in your budget, no matter how much time you put into making it.

Just stay true to your list and your budget for each gift. In the end, all that matters is the gesture, right?

Step 5: try the 24-hour rule

We did mention to stick to your list of gifts, but if any adjustments are still to be made, try this 24-hour rule. For some people you might think that an expensive gift will suffice, but what if you’d sleep on it?

Better said, what if you’d sleep on the entire list you made?

Just take some time and think it over. For instance, maybe you see an expensive product that could really please one of your loved ones.

However, don’t jump right on buying it on the spot! Let some 24 hours go by before you decide that it’s really worth your money.

The same goes for online shopping. Put in the shopping cart all the items you prefer and leave them there for a day, but don’t check out.

Make your final decision the next day, after you’ve given it some thought. Who knows, maybe this wait is worth it, as you may get a good deal or sale with some of your chosen items.

This whole process boils down to the idea that any initial excitement about a certain product wears off. You might even realize that you don’t really want to spend money on it afterall. 

Just understand that anyone who truly cares about you, won’t expect you to break the bank for them. Maybe something less expensive, but more thoughtful will do the job, don’t you think?


Holidays are a time of joy and love, of giving and receiving. Never assume that an expensive gift is more entitled to be called a gift than a cheaper one.

What matters most is to know how much money you have access to and always put thoughtfulness first, before any brand names or other such superficial criteria in choosing the gifts.

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5 Simple Tips to Help You Make a Budget for the Holidays
The holiday season is that time of the year when everyone wants to give the best gifts. This can only happen if you spend some money and this can be a little tricky for some of us.
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