Creating a Christmas budget and a plan for the new year helps you balance short-term fun and long-term financial stability. Planning early ensures you avoid holiday debt and stay prepared for next year’s big obligations.
Don’t let financial stress dampen your holiday spirit this year! Pairing your Christmas budget with your financial planning for the upcoming year means you can celebrate the holidays without derailing your long-term financial goals.
The Gift of Early Christmas Budget Planning
Planning ahead for Christmas gifts, travel, and celebrations allows you to spread costs out over time and avoid last-minute splurge spending. At the same time, mapping out your known expenses for the coming year, such as vacations, home projects, and tuition payments, gives you a clearer picture of what’s ahead and helps you prioritize your savings (and dial back the holiday spending if needed).
Tips for Building Your Christmas Budget
The Lake Region Bank team has a few pointers for you as you create your holiday budget this year.
- Create a separate fund: Use our automated online banking system to set aside money each month into a separate savings account.
- Use last year’s spending as a guide: Review what you spent on gifts, travel, and events last year to set a realistic budget.
- Track your progress: Use a budgeting app or spreadsheet to monitor your holiday savings goals.
- Track your spending: Once you start shopping, keep track of your holiday expenses on an app or spreadsheet.
Tips for Planning for Next Year’s Expenses
With your holiday spending plan ready to go, it’s time to plan next year’s expenses, too.
- Use last year’s spending as a guide: Review what you spent on home projects, vacations, and other big expenses.
- Plan for irregular expenses: List any big costs you’re anticipating next year, such as car repairs, weddings, or new appliances.
- Prioritize needs over wants: Decide what’s most important for your next year’s plans and cut back on less essential areas as needed.
Benefits of a Combined Budgeting Approach
When you budget for the holidays and the new year together, you’ll experience fewer financial surprises, reduce the temptation to overspend during the holidays, and enter the new year with confidence.
The key to stress-free holidays and a financially secure new year is planning and saving early and sticking to your plan. With a little prep, you can enjoy the holidays while setting yourself up for success in the year ahead.
Want more savings and personal banking tips? Check out our Personal Banking 101 page today!
Christmas Budget FAQs
How much should I budget for Christmas?
It depends on your financial situation, but many experts recommend spending no more than 1–2% of your annual income on holiday expenses.
How can I save for both Christmas and next year’s expenses at the same time?
Set up separate savings accounts for each goal and automate monthly contributions.
What if unexpected expenses come up next year?
Include a cushion or emergency fund in your budget to cover unplanned costs without derailing your savings.
Can I use credit cards for Christmas spending if I have a budget?
Yes, but only if you can pay the balance off in full to avoid interest charges. Otherwise, stick to cash or debit to stay within your budget.
