It's a little late in the year to begin budgeting for Christmas, some might think.  But many people are just starting to look at what's left of their last paycheck before Christmas and wondering how that one check can pay for Christmas.

One thing about Christmas is that it happens every year at the same time, no matter what. So you can always budget for it. It's generally good advice for most people to begin budgeting Christmas in January.  However, most people ignore that advice and budget Christmas in December and begin paying it off in January.

Seems backwards, but that is how most Americans do the Holidays.

This year, most of us don't have the luxury of a lot of credit cards and easy knowledge we can start paying those bills next year. So going back to the “plan ahead” doctrine of our parents, let's look at a simple Christmas budget, line by line, and get a rough idea of what you should budget for. The dollars and cents for each will be up to you, but you know your general total, so work from that.

These numbers, of course, aren't likely to be yours. Every family is different and the holiday means something different to everyone, but our culture as Americans is generally observant of the things on this list.

Decorations – no matter what they are, you have to buy, repair, or make them. Usually a combination. If you can budget for it, buy longer-lasting decorations you can use every year instead of cheaper paper and cardboard versions that always become the scene of an accident by the end of the season.

Food Beyond Groceries – regular grocieries aside, what are your holiday meal plans? Will you be hosting a large gathering, just family, will it be a single day or multi-day affair? Do you need extra ingredients for cookies, pies, and so forth? Budget for all of that.

Cards – it seems simple, but it's amazing how many people forget about the expense of cards in their Christmas budget. Don't forget the stamps to mail them either. Some families also make and print newsletters, have photos taken, etc. Factor all of that in.

Gifts – ahhh, the nitty-gritty. Most people's Christmas budgets will center around this. Include everyone you'll be buying for and then figure out how much money to spend on each. Parents usually spend more on children than one another or will skimp on each other's gifts in order to get more for the kids. However you do it, make sure you keep perspective on wishes versus realities.

How I Budget

Knowing the above needs, this is how my family generally budgets our Christmas spending every year. I start with our overall dollar figure to be spent. Talking with my wife, we'll usually start with food, as this is most important for us and makes the holiday bright no matter the number of gifts under the tree. Then cards, since outreach to friends and family we often only talk to this one time of year is important to us. We usually include at least one family photo in those cards. Then gifts, focusing most on our children and the children of those closest to us. In our view, a gift to a friend's child is the same as a gift to the friend and our close friends are generally in agreement. Finally comes decorations, which are minimal in our house and revolve around crafts for the children with most of the permanent decorations being pulled out of storage.

That is our general Christmas budget, which we usually sit down to lay out shortly after Thanksgiving. By then, the yearly savings have been tallied up and our budget to the end of the year is done.

How do you budget for Christmas?

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