TAKE CHARGE OF YOUR MONEY
12 steps to a jolly Christmas budget
Source: Inquirer


INQUIRER.net
First Posted 09:11:00 10/07/2008

(This is part of Take Charge of Your Money , a partnership between INQUIRER.net and Citibank to help readers handle their personal finances well.)

Question: Christmas will be here soon! In the past years, I did all the preparations and gift shopping two weeks before Christmas, and I would always end up sick, tired and feeling broke afterwards. What can I do to make things better this year? – Bea

Answer: You’re right, Bea, Christmas is just around the corner. Christmas carols are already playing and holiday bazaars are now being held in many venues all around town.

The key to managing Christmas preparations well is simple: plan early. That includes making your Christmas budget this early so you won’t feel tired, spent and broke after the holidays. Doing all the budgeting, shopping, wrapping of gifts, and partying in the two weeks before Christmas is a recipe for disaster for your health and pockets.

Below are surefire ways to making your Christmas budget and sticking to it:

1. Have a general worksheet by the end of this week. This can be on paper or on your computer. On the left column, write down: gifts, supplies, postage and courier service, décor, parties, charity, and any other expense item you may have this Christmas season. By writing down expected expense items, you are made aware of the expenses you may incur in the next three months aside from your usual living expenses.

2. Find out how much you generally spent last year for all the above items. A ballpark figure is enough; the purpose is to set an amount you more or less may expect to spend this holiday season. You may want to add at least 10 percent to last year’s amount to cover this year’s expenses.

3. Review your finances this incoming last quarter of the year. How much will you be earning? How much will you be spending for your day-to-day living? And how much can you set aside every payday to meet your target Christmas fund? Take a look at your savings too and determine how much you can get from your fund to cover the season’s expenses. Aim to have at least one-third of your Christmas budget on hand by October, the next one-third in November, and the last one-third on the first week of December.

4. Given your total spending budget determined in number three, allocate it by allotting a specific amount per expense item in your worksheet. For instance, you may want to set aside P10,000 for gifts, P1,000 for décor (especially if last year’s Christmas tree and lights are still in good condition), and P1,500 for supplies such as gift boxes, ribbons, cards, and the like. Stay within your total budget amount. Ideally, do numbers one to four above this first week of October.

5. Make a gift list specifying the names of people you want to give gifts to. Group them into family, friends, business associates, and clients. Make a separate list of people you will be sending greeting cards to. Make room for about two or three recipients of extra gifts just to be sure.

6. Apportion your gift budget among the names on your gift list. Allot a ceiling amount for getting a gift for each recipient. To save on cost, consider giving group gifts such as a basket of baked goods to people working in one department in the office.

7. Now that you have your gift list with amounts tacked onto each recipient, start shopping this October and continue on until November. Since you have more time now as it’s not yet December, commit to find gifts within your budget. Go to bazaars, department stores, bargain havens like Divisoria and Baclaran, and weekend markets where you may be able to find great deals. Shop this early for Christmas décor and supplies too. There are also a lot of good finds in online shopping sites so search the Internet for local sellers offering unique goods at reasonable prices.

8. If you have the talent for cooking or doing crafts, consider making personalized gifts. These will be well appreciated by the recipients, and will lower your cost.

9. If you are going to host a party in the coming holiday season, plan for it early as well. Based on your budget, decide on the venue and menu, and even a caterer, if this is what you prefer. Then book the caterer and venue as early as possible. By doing so, you may be able to get lower rates and preferred dates. A way to cut on costs when it comes to parties is to have potluck gatherings. This may be more fun as well as guests will be able to sample each other’s family specialty.

10. For those people who seem to have everything, why not give charitable donations in their name? Any amount that can help people in need will be appreciated.

11. Every time you spend for something, write it down. Keep a running balance on your worksheet and compare this with your budget to see how much funds you have left. Stay within budget as much as possible. At the end of the season, if you find that you have stuck to your budget, celebrate your success! Your reward may be as simple as a massage at a spa or a movie date.

12. Keep your worksheet for reference next year when you make your next Christmas budget.

A workable and realistic budget can be a great tool for you to plan your holiday season well.