Preparing Financially for the Holidays

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Between office holiday parties, potluck dinners, buying gifts for eight additional family members you only see once a year, and generally higher ticket items being gifted to your loved ones, preparing for the holiday season can be a stressful financial time.

In 2016, shopper’s in the US plan to spend on average $929 dollars this year on gifts according to American Research Group, all while 55% of us are living paycheck to paycheck.

Where are we planning on getting this extra $929 bucks!?

Hopefully, the answer for all of our readers is preparedness.  I mean, every year we all know the holidays are coming, it’s not a surprise expense, so surely we don’t wait until the paycheck before to “get prepared” do we?

In our household, it’s real simple, we tally up the number of those near and dear to us and set a budget for each person, multiply, divide by the number of paychecks per year, and boom, budget.  Here’s an example:

12 loved ones x $50 per person = $600 for loved ones

Add in a little love for the wife and I…

2 x $150 = $300 for ourselves

So that’s $900 in gifts for the holiday season, now to budget:

$900 / 24 paychecks per year = $37.50 per paycheck

And there you go, definitely not down to the penny, but come every holiday season, we’re prepared to shower our family with gifts, and you can do this in advance with a little foresight.

Need an extra little budget hack? In our budget, we just take this number and double it in a category appropriately named “Gifts”.  Why? Birthdays! We figure, all the folks we buy for during the holidays, we’ll buy for on their birthday, why not be prepared!?

If you’re one of the readers that isn’t prepared this year(tisk tisk), we’d recommend these two guides to help you along your way:

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