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What To Do When You Are Overspending at Christmas

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Overspending at Christmas

I have a confession.

I overspent my Christmas budget.

(And I’m not done shopping.)

Overspending At Christmas

I did everything right. I made a list of who I was shopping for and created an overall budget. All was going well until I deviated from my plan.

Typically I plan a vacation for Christmas. I prefer to gift experiences to my family over wrapped presents. Last year, we went to Disney World. The year before, we went to Great Wolf Lodge.

However, this year, my daughter wanted a saddle, and my son had been asking for some 1000+ piece Lego sets. These were items I’d buy for my kids outside of Christmas, so I thought let’s go ahead and have Santa buy them. We’ll stay home this year and spend our budget on Christmas presents.

I also expected this would create a more relaxed Christmas. I wouldn’t have to coordinate the logistics of travel, and I wasn’t planning to buy much for Christmas. After all, the presents I was going to buy weren’t extra for the sake of Christmas.

I was wrong.

It’s not more relaxed and I’m buying more presents than what was on my list.

Creating A Budget Buffer

Something I always do is that I plan to go over budget ahead of time. I do this by creating a budget buffer – usually 5 to 10% of my overall budget. Because overspending at Christmas is not an unrealistic scenario.

Since we’re home this year, I’ve been more inclined to accept invitations to Christmas parties. Also, because we are home, we’re going to my in-laws Christmas morning. This added additional people to shop for that were not on my original list.

But good plans are fluid, so I adjusted the budget per person to accommodate the extras.

Another thing that surprised me is my kids wanted to buy presents for other people. I appreciate this, and it was a simple budget obstacle to overcome.

They pitched ideas on what they would do in exchange for extra money. I was able to secure some “maid” service for the next few weeks in exchange for some small gifts. The amounts were small enough that it didn’t set me over budget because I had built in a buffer for unexpected purchases.

Plan For Budget Obstacles

What I didn’t expect was nostalgia to travel over Christmas. Impulsively, I booked a 3-day trip to Legoland. I paid the full price for the hotel room and park tickets. I was able to use miles for two of our plane tickets and paid for the other two. This was the primary reason that led to my overspending at Christmas.

So what am I going to do now that I’m WAY over budget?

Good plans should be fluid and be able to accommodate roadblocks.

I have to sacrifice in other areas of my budget. I reduced the amount my husband is allowed to spend on me and I pulled from our travel savings account to cover the hotel and tickets.

To pay for the plane tickets, I pulled from January’s budget by cutting expenses. Food was cut back, clothing was eliminated, and I cut the flash cash budget in half.

What I Learned

Through this process, I have been reminded of how grateful I am that:

1) I have set my budget up to accommodate impulse decisions – knowing this is standard behavior for me,
2) I have diversified my income so that I know I can generate some back-up income when I needed, and
3) I am committed to remaining debt-free. A few years ago, I would’ve slapped the trip on a credit card and not thought twice about taking two years to pay for it.

 

Have you gone over budget this Christmas? How do you handle impulse purchases? Is your budget set up to accommodate your personality? Let us know in the comments.

Read more:

5 Ways to Buy Cheap Christmas Gifts for Kids

Three Things You Can Do to Make Money for Christmas

Favorite Family Christmas Traditions, Modernized!

 

3 Ways to Pay for Your Christmas Expenses

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Worried you're going to bust your Christmas budget? If so, check out these three ways to pay for your Christmas expenses!Christmas can be a very expensive time of year. For most, waiting until November to deal with all the impending expenses won’t work and cause undue stress.

The easiest way to manage Christmas expenses for most is to start early. That is, immediately following Christmas! Yet after saying this, I find most people have a hard time thinking about the following Christmas before this one is even finished but arguably the easiest way to manage your Christmas cash is to set aside the money every month beginning in January.

An alternative is that you actually buy presents every month until December by taking the number of people you have to buy for and divide by 12. I have done both and personally prefer to save the cash every month.

Here are some other ways you can keep Christmas from blowing your budget.

Sell your stuff.

Opening an account where you can save any extra money is a great way to not interrupt your daily cash flow and still save for Christmas. Again if you start early and save year-round you may be surprised how much extra money you can come up with, especially if you hold a yardsale(s) in the warmer months!

Get a second job.

Though I never actually did this, plenty of my friends did. They would pick up a seasonal job that allowed them to bring in extra money and get discounts at some of their favorite stores. Conversely I had a friend who would get a second job at her favorite clothing store every year and buy almost her entire year wardrobe during her employment there, saving all of her clothing spending money year-round for Christmas.

Use extra paychecks.

My husband and I are paid bi-weekly but budget monthly. This means there are two months of the year where we’re actually paid more. Rather than budgeting this extra money in our monthly cash flow we opt to use it for one-off expenses, Christmas being one of them. One of our pay-periods is October or November depending on when payday falls and of that extra pay we take out our extra money and use a portion of it for our Christmas expenses. While this works well for us I understand it’s not for everyone! Point in case, we won’t be completing our shopping until middle of December this year. For some that may stress them out but we’re so used to it we’re both very organized and are able to go out in one to two trips and get everything accomplished.

Whatever method you use to pay for your Christmas expenses, the point is that you do whatever you can to limit stress on you and your family. Please also remember that not doing gifts can also be perfectly acceptable and don’t be afraid to suggest it!

Though I prefer our current method to all other suggested I’m curious to know how other people manage Christmas expenses. Where I’d rather not even think about it until at least November I feel like most people in my life prepare year-round, what do you do? Do you use different ways to pay for your Christmas expenses?