How Much Should I Spend on Christmas?
Christmas is just over a month away! We love this time of the year. The leaves are falling and there is a smell of spice in the air! There can also be an overwhelming feeling of stress and anxiety about Christmas expenses. That’s why we are here to help! Budgeting for Christmas doesn’t have to be a dread; with proper planning, it can be easy and stress free!
There is no one-size-fits-all when it comes to Christmas budgeting. It depends on several factors. Let’s break those down:
1. Your income and potential bonuses
Your income is the driving force behind all purchases. Overextending yourself or using a credit card to purchase gifts can be a slippery slope that you want to avoid. If you receive a Christmas bonus, a good rule of thumb is to spend 50% of last year’s bonus on gifts.
2. Your savings
Something we suggest doing starting January is setting aside a certain amount every paycheck or every month for Christmas. In 2021, the average American spent $997.73 on gifts and holiday items. If we take that average and divide 11 months of saving, that would mean you need to save $90.70 a month from January-November. That is a whole lot easier than finding almost $1,000 extra in the budget come Christmas time.
3. How many people you’re buying for
Purchasing gifts for a family of 6 will be much different than a family of 3. How many people you are buying for is a big factor in how much you’ll be spending. If you’re trying to save for a certain number of gifts or people to buy for, set a limit on how much to save per person. For instance, if you are wanting to spend an average of $150 on each person, and you’re buying for 6 people, you’ll need to save $900. That doesn’t mean each person will get a $150 gift, but it allows you wiggle room to spend the money on your loved ones. It’s always better to save too much and have leftover than to go over budget and borrow money.
We hope this helps give you some direction on how much to spend in the Christmas season and how to prepare for it ahead of time. Happy Holiday season!
