December is the month most budgets break, and rarely because of one big purchase. It is the sum of small ones (a gift here, a dinner there, a train ticket home) on top of the usual bills, often in the same weeks as a yearly insurance or the card bill. The good news: Christmas is the most predictable expense of the year. You know when it comes and roughly what it costs. Planning it takes four steps.
1. Write down everything December will cost
Not only gifts. Go through the list and put a number next to each line, even a rough one:
- Gifts: one line per person, with a limit.
- Food and drink: the big dinners, and the extra shopping around them.
- Travel: trains, flights, fuel, parking.
- Going out: work dinners, drinks with friends, New Year's Eve.
- The house: tree, decorations, cards, postage.
- A reserve: about a tenth of the total, for what you forgot.
Add it up. That is your Christmas budget: a number decided now, not a surprise in January.
2. Check it against what the month leaves you
Christmas is paid from what is left after the bills, so start there: what will your accounts hold at the end of December, once rent, direct debits and everything else due before January's salary has gone out? If that month end covers the Christmas budget with room to spare, you are done. If it does not, you know by how much, and you still have weeks to fix it.
Remember the bills that come once a year and like to land in December or January: insurance, a subscription renewal, the car tax, a tax payment. They are what turns a fine December into a hard January.
3. Set it aside week by week
Divide what is missing by the weeks until the day you will spend it. Six weeks before Christmas, a gap of 300 is 50 a week: much easier than 300 in one go. Move it to a separate account or savings goal every week, so it is not spent on something else first. If even that is too much, go back to step 1 and cut a line: fewer gifts with a lower limit, or one dinner fewer.
4. Spend from the plan, and look at January
- Tick off as you go. Mark each gift and each dinner as paid. Seeing the budget shrink keeps you inside it far better than a card statement in January.
- Keep an eye on the daily amount. What you can spend per day until the next salary tells you, any day of December, whether a spontaneous purchase fits.
- Plan January before it starts. December's salary often arrives early and January's feels very far away. Check the end of January too: if it looks tight, now is the time to slow down, not on the 20th.
The usual mistakes
- A budget for gifts only. Food, travel and going out often cost as much as the gifts.
- Paying with the credit card and forgetting it. The card bill arrives in January, together with the usual ones.
- No limit per person. Without one, the total grows by itself.
- Counting the savings account as spendable. If it was meant for something else, it is not Christmas money.
Do it in Xpenses
Add the Christmas budget as one-off expenses in December (one per line, or one in total), and a weekly transfer to a savings goal for what is missing. Xpenses shows at once what your accounts will hold at the end of December and of January with all of it included, warns you before an account goes below zero, and tells you every day how much you can spend until payday. It is free. See savings goals, how the daily amount is calculated and the month-end forecast.