During the holidays, money is always in short supply and for many, budgets are tight. Below is a list of some best practices I have picked up over the years to keep myself accountable and to avoid some of the Holiday fund frustrations.
- Create a 50/30/20 household budget on an excel spreadsheet that you stick to and use a budget calculator to assist you in figuring out your income after tax. The idea originated from the book “All You Worth: The Ultimate Lifetime Money Plan. The book advises that you limit your needs to 50% of your monthly income, 30% to wants and 20% to savings and debit repayment. By definition, a need is your electric bill and your cable bill is a want.
- Set up a Christmas fund with your financial institution to create a ready-made saving for Christmas shopping and events out of that 30% that you are allocating for wants. Do not allocate more than 1.5 percent of your household annual income to your Christmas fund.
- Create a list of everyone on your gift list and create a budget per person based on the 1.5 total amount.
- Download an App such as Mint to track your spending. In minutes, this app provides a complete picture of your account balances and transactions together. Mint automatically pulls together all your financial information into one place. This allows you to see spending patterns, investment strategies, and budgeting views as to how well you are keeping to the 50/30/20 rule all year long in categories you create.
- Use GASBUDDY to help you find the cheapest gas prices for when you are filling up and heading out to your Holiday events.
These are just a few ways to be aware of your spending ability and stress-free while you are holiday shopping.