How to set up a Christmas budget

Did you know that South Africans spent more than R250 billion on Christmas last year? That is a ton of gifts, food, Santa hats, and decorations. However, the increased cost of living may reduce households' discretionary spending over the holiday shopping season.

Make a Christmas budget and then stick to your goals if you want to enjoy the holiday season without overspending. Once your plan is in place, you will not feel guilty throughout the Christmas season while you buy, spend, and enjoy yourself.

Why do you need a Christmas budget?

If you don't track where your money went over the holidays, January's finances will suffer. You face the danger of running out of money if you don't have a budget. You should try your best to save money. Before you go on any Christmas shopping trips, pay your debts. By creating a sound budget, you can make sure you have enough money to spend.

Here's how you can set up a Christmas budget:

• Establish a spending limit

In a perfect world, you would have a record of your previous Christmas spending. This amount can be used to assist create a budget. If not, you'll need to make an estimate. However, keep in mind that expenditures might increase annually due to inflation, so you should include a small reserve from your prior expenditures.

You may also build an estimate depending on who you want to purchase gifts for and how much you want to spend on them. For instance, you may establish a cap of R250 for close relatives and R100 for other family members or friends. Do not overlook any additional activities, such as the office secret Santa and grocery shopping.

• Use a separate account

For your Christmas gifts and necessities, you might want to use a different bank account. As a result, you won't be tempted to misuse the money for other purposes because it will be kept apart from your usual spending money.

Try using cash if you're on a tight budget or just want to save money. Simply set aside a certain amount of money to be used solely for your shopping activities. It will motivate and assist you in remaining on track.

• Save money on gifts

You don't have to be the Grinch this year if you want to spend less on gifts. Look for sales. Use coupons. Instead of spending a lot of money on gifts at the shop, consider making your own. Give baked delicacies as presents. Leave out all the random gift-exchanging. Simply draw names and buy one gift for each individual you get, rather than buying gifts for every member of the extended family.

• Monitor your spending

It's easy to veer off course if you don't keep track of your spending or use self-control to keep yourself on track.

Choosing a method for tracking your expenditure and budget is the first step. You could do this by hand with a piece of paper and a pen, but utilizing a budgeting tool is typically faster and more precise because many of them can sync with your bank accounts without any further work.

Then, make sure your spending is in accordance with your goals by checking your budget each time you go shopping. You will have to limit your next shopping trip if you fall behind.

Making a list of the people you want to buy gifts for and formulating a Christmas budget that covers all of those demands is simple when you have a strategy in place. Naturally, you shouldn't neglect additional holiday costs like party clothes, food and drinks for parties, and Christmas presents for the hosts.

Knight Frank are property experts in the Atlantic Seaboard region. Get in touch for all your property needs this festive season.