Tuesday, December 23, 2008

Christmas Budgets - Lessons Learned

Ah, my Christmas shopping is long done and now I just have a few things to wrap and some homemade gifts to finish up and I will be more than ready for Christmas. Good thing too - because I blew my Christmas budget. That's right, I saw the line and like Santa over rooftops, I went sailing right over it. Sigh....

Actually, it isn't all that bad. I put away a small amount each week into a Christmas budget, which gives me $650 for Christmas. I've been doing this for a couple of years now, and I absolutely love it. It really does take the financial burden off. I also create a budget based on estimated spending amounts. With my family this is pretty easy since my sister and I set them towards the beginning of the holiday season. Normally I keep a notebook in my purse and write down what I buy for whom and how much it costs. That $650 just gets put into checking to cover costs. This year, however, I did things a little differently.

First of all I created a spreadsheet, rather than using a notebook. I then added in the exact amounts spent from receipts, rather than from memory. Purchases were all made with a credit card, for which I set up automatic payments for, or made with cash specifically taken from my Christmas fund account. This really did help a lot with the tracking of money. Another new thing that I did this year was track other holiday purchases on my budget - Christmas cards and stamps, ingredients for dishes I made for holiday parties, etc. These things all came out of the Christmas funds as well. However, since I had never counted these before I wasn't sure how much I normally spent. That threw my budgeting off because I underestimated. The good news is that now I know and will have much better figures for next year.

As far as gifts go, I overspent on each close family member by a little less than $20. The good news is that for friends I was able to come in right at or slightly below budget. I have one friend who I am $.94 under budget on - that's just about perfect.

So, what I have I learned?

Even though I went over budget, I am really happy with how everything turned out. I was able to get everyone I love gifts that I am really pleased with, without adding one drop of debt. I also now have a much better idea of how I need to split up my holiday funds. Next year I am going to add just a little more to my Christmas fund, maybe get it closer to $700 so that I can cover not only presents but also party food, activities, cards and so on. That is only $1 more a week than what I am doing now - and it is going into an interest paying savings account, so I make money off it as well.

I should quickly say that the $12.50 I set aside each week is part of my "I need $900 a month" budget. However, I know that if something should happen, I could stop making those payments in a heartbeat and access that money if I needed to. There isn't one person in my life that wouldn't understand if they didn't get a gift from me. But, if I can make it all happen just like I did this year, then I am going to. It makes me incredibly happy!!

Something else I can do for next year is to start a little earlier. I started my online shopping around the middle of November, which worked out pretty well, but there are certain things that I could have bought earlier. That would have meant less last minute running around, which probably could have kept me closer to my exact budget. A few of those items that pushed me up over the limit were total impulse purchases brought about by shopping in stores rather than online.

Another vow I have made is that from Dec. 15th - Dec. 25th, I will not shop in any store that is not 1) local and 2) have approximately 50 parking spaces or less. Yesterday I braved a mega-grocery store. Big mistake! It was crowded, people were irritable, and even though they had all check out lanes going, I waited 30 minutes just to get my two small bags of groceries. In contrast, this morning I stopped by a local specialty food and wine store and an Ace Hardware. People were friendly, happy and there was plenty of parking. It was such a difference from yesterdays trip, that I am going to vow to save my sanity and only do last minute stops before Christmas in small, locally owned, unique businesses. No Target shopping for me!!

So, are you ready for the holidays?

Photo by: KevinThoule


Catie said...

I went sailing over my budget too (I love that line, by the way!) and I know exactly why: last minute running around. I got to the point where I stopped tracking (or caring!) because I just had so much I needed to get done! Lesson learned, moving on....

Dawn said...

I did the exact same thing Catie! to a tee. And yeah - there is something about those last "crunch" days of shopping that were so frantic I stopped caring about my budget. Like you, I've learned my lesson. Next year I want to shop early and really minimize my last minute rush.