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Personal Finance Advice from

The Simple Holiday Budget Anyone Can Follow

Stay in the black when the red and green take over.

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Did you promise yourself you'd finally make a solid budgeting plan this holiday season — and stick to it? We've got you covered with these simple steps anyone can follow.

See Also on Kiplinger: 13 Ways to Waste Money During the Holidays

1. Set Aside Only the Amount You Can Afford

So many people start the New Year in debt solely because of overspending during the holidays. You don't want that burden on your back. Rather, when planning your budget, allot only an amount you can actually afford, preferably in cash already saved, to the gifts you'd like to buy.

"Do not go into debt with holiday spending," warns consumer expert Kevin Gallegos. "Making that commitment means changing your mindset. It may be telling yourself that giving people what they think they deserve is a mistake. You'll also want to avoid the trap of feeling you must give a gift equal to what someone gave you last year, or creating a perfect ski slope of presents under the tree. Chances are that your family and friends really don't want you to suffer financially in order to give them bigger gifts."

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It also stands to reason that they may not have returned the gesture in kind, either. So there's that.

2. Set Limits for Total Holiday Spending

Before you ever leave the house — or turn on the computer to shop online — you should establish how much you plan to spend this season and perhaps even on each person on your list. Having a specific number in mind will not only provide a guide as to what your limit is, but it will also help you choose the perfect gift for everyone based on how much money you've assigned to them.

Alexis Nido-Russo is the owner of Chicago-based online jewelry store Local Eclectic, and she offers a very specific way on how to break down your holiday budget.

"Determine what your total budget for the holidays is, then map out who you have to buy for and assign percentages to each person or category," she says.

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For example, if there are six people on your list and your total budget is $1,000, perhaps your percentage breakdown looks something like this:

  • Husband: 20% or $200
  • Daughter: 30% or $300
  • Mother: 15% or $150
  • Sister: 15% or $150
  • Mother-in-law: 10% or $100
  • Best Friend: 10% or $100

Of course, your specific budget and who appears on the list will vary. You also can shift numbers around if you find the right gift at a lower cost, or you can send that money back to your savings account where it'll better serve you. Also remember to factor in ancillary holiday expenses too, which can absolutely decimate your budget if you're not careful; things like holiday cards and postage, teacher gifts, travel costs, and food and drinks for entertaining.

3. Gather Your Coupons and Discounts

Go through your favorite circulars, emails, and apps to scrounge up all the deals and savings you can — then start to map out a plan of attack. For example, I'm on the email lists of many of my favorite retailers who send me a seemingly never-ending stream of promotional messages throughout the year, but especially around holiday time. (I recommend creating a dummy email account for this to preserve your sanity, by the way.) Because I'm privy to insider information, I try to schedule my shopping around their biggest sales and pair them with additional saving that I may have from mailers, previous shopping trips, or in my text messages — all of which are excellent ways to receive additional discounts.

See Also on Kiplinger: 15 Things You Should Never Buy During the Holidays

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4. Make Cuts to Your Gift-Giving List

In a perfect world, we'd buy presents for everyone we know during the holidays — but that's just not feasible. So instead of trying to sneak everyone in because you feel obligated to purchase something, stick to those closest to you.

"If your shopping list includes more than five people outside of your immediate family, cut down on the number of people on your gift list," suggests Rachel Namoff, managing partner of Denver-based asset management firm Arapaho Asset Management. "Then, make a homemade gift, like cookies, to give to all the people you snipped from your original gift list. Ensure you spread the holiday cheer without looking like a Scrooge while enjoying a fun activity with the family."

If you still feel like you may be blindsided by a rogue gift for which you have a return gift, there are a few things you can do:

  • Update your status on social media that details your holiday shopping plan and who's on the list. Remember, there's no shame in being on a budget, especially if money is already tight.
  • Contact people directly and let them know that you won't be able to exchange this year if gift giving to one another was established in the past.
  • Keep your unwanted gifts in storage to have at the ready so you can provide something in return if you feel so obligated.

5. Enlist the Help of Budgeting Apps

If you're not particularly financial or budget savvy, you can find help online. In fact, there are plenty of mobile apps that'll keep your holiday budget just a few taps of the finger away so you can access it while in real time while you're shopping. Gallegos recommends apps from Mint or Quicken to simplify the process, but there are plenty of others available — and we've detailed them in abundance here on WiseBread.com — that will track your spending down to the cent.

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6. Thoughtful Homemade Gifts Are Cherished and Inexpensive

Namoff suggested baking cookies for those you're trimming from your main list this year, but there's no reason you can't extend this homemade concept to the more important people in your life. I'm admittedly materialistic — I love my stuff — but I'm not devoid of sentiment, thus I prefer thoughtful, handmade items over anything store-bought because I know what kind of time and effort goes into a gift like that. (See also on WiseBread.com: You Can Make These 23 Delicious Holiday Gifts)

Another argument for going this route is that most people in your life rarely need anything that they don't already buy themselves. Personally, if I want something, I save for it and buy it; I don't wait to pawn it off on someone else at Christmas. Certainly I have provided a list of items to my family in the past, but those are merely suggestions and nothing that I need. What I need to know is that you care, and the best way to do that is to sit down and think about how to put a smile on my face at holiday time, and you'll get that reaction from me if you spent more time than money on my gift.

7. Stop Waiting Until the Last Minute to Do Your Shopping

They say the early bird gets the worm, and that's completely true at holiday time. While there are plenty of arguments on why Black Friday isn't necessarily the day you'll get the best deals — there are amazing offers all times of year and even between Thanksgiving and Christmas — but you will absolutely do yourself a disservice by waiting until Christmas Eve to buy presents.

See Also on Kiplinger: 10 Financial Decisions That Will Haunt You Forever

For starters, by then the pickings will be slim, and you're probably going to disappoint your loved ones with your laziness. Secondly, if you're an online shopper, you will often spend an incredible amount of money on shipping charges the last couple days before the big day, and even then you're not guaranteed that it'll arrive on time in some cases. Save yourself the headache, heartbreak, and surcharges by scheduling your shopping at least a couple weeks before the holiday.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website.

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This article is from Wise Bread, not the Kiplinger editorial staff.