Creating a budget is pretty easy, most of the time. All it takes is the willingness to spend an hour or two going over income spending habits and making the numbers come out right. Sticking to that budget is something that requires daily attention, even during the holidays as every dollar in and out affects your bottom line.
As much as budgets are about discipline, the experts all agree on one thing: a successful budget is a flexible budget. Without a little wiggle room for emergencies, tiny (and infrequent!) splurges and some unaccounted for costs, your budget is almost guaranteed to go out the window at some point.
"Setting too rigid a budget is self-defeating. Like an overly-restrictive diet, you won't stick to it," say the editors of The New York Times Practical Guide to Practically Everything. "But slow and steady gains can be made by setting realistic goals as you periodically reassess your target goals."
Organization is also key in creating an appropriate budget and making sure you stick with it. You have to know what's coming in and what's going out, and you have to understand how each day's expenses and incomes affect your long-term goals including holiday expenses.
There are some simple steps: use cash if you tend to overspend on credit cards, set aside a specific amount for discretionary spending each week, move money directly from your paycheck into a savings or investment account and never touch this account for normal expenses. All these are basic ways to keep within your budget. With the holidays upon us, it is never too early to think about how you will stick to your budget.
Here are some helpful tips
- Make a list and check it twice. List all the people you want to give gifts to and how much you are willing to spend for each person.
- Prepare for a few add ins. Budget to spend for a few extra people not on your regular list and think of something generic to give (i.e. movie gift card, bottle of wine, passes to children's museums, etc.) If you have to add more people to the list, you're budget can accommodate a few surprises. However, do minimize the number of people you add last minute so you don't blow your budget.
- Do research and price comparison. Once you know what you want to give each individual, find out how much the items cost and use the non-sale value in your budget. In the event that you can't find a coupon or a great deal on the items, you've already allotted to spend that much on them.
- Shop during sales. Black Friday and Cyber Monday are fantastic days to make purchases for holiday gifts. The savings you reaped to shop for your list may just be enough to cover any last minute gifts you have to buy.
- Be a smart shopper. Use technology to your advantage. There are websites that you can sign up for to receive alerts when the items you are looking for are on sale.
- Get creative with your gifts. Handmade is so en vogue. If you are crafty, making presents is often times cheaper than buying them. Also, gifts don't always have to be tangible objects. You can use and share your talents instead.
Establish your workable holiday budget before the holidays begin.
Check in with spending and income regularly, even daily.
Follow these tips, for a wonderful and stress-free holiday season!
Source: American Heritage Bank