How We Stopped Overspending (and Over Gifting) During the Holidays

It’s time to take back control.

If you stop to think about your Christmas list, it can be overwhelming. Not only are you thinking of your own family, but also likely your siblings and their family, your parents, grandparents, and maybe even cousins or extended family. Then if you go to the next tier you might also be gifting to the other important people in your life, like friends, your children’s teachers, and maybe even the garbage and mailman. This list can be quite overwhelming.

If you are like us, previously, we would head out to stores blindly and buy whatever we thought might be a good present. We didn’t really keep track of what we had bought, and for whom, so we just kept buying. Then, a few days before Christmas, we would gather up all the presents we had stored and sort them into piles. One child, usually our oldest, would have more gifts in quantity and in value than his siblings. Another child, usually the baby, would have the fewest, as “they wouldn’t really notice anyways” (we told ourselves). And usually, we would also realize we had totally forgotten someone on the list, and needed to run out at the last minute to buy a gift. Christmas shopping was a chore.

This wasn’t working for us.

Our bank account would take a pretty big hit during in the month prior to Christmas, and on one full-time salary for our family, it would take a few months to recover financially. However, in the last few years, our family has gotten a handle on not only the list, but also our spending related to the list.

Taking from Dave Ramsey’s principles for money management, we made a budget. On an excel spreadsheet, we listed out everyone that we were to buy for, and even a category for gifting to our community. Then, we gave each person a total. After summing these together, we now had our Christmas budget. Starting that next January, we made an automatic draft from our checking account to a Christmas savings account twice a month. This was manageable for us and we never missed the money since it was being pulled out in smaller increments. By the end of the year, we had all the money we needed for Christmas without draining our checking account.

When comes time to buy gifts, I keep track of the presents bought on that same excel spreadsheet. I list the total of the individual items by person and sum those as well. Now I know how much has been spent and how much remains. I have taken back control.

Christmas shopping is now fun, not worrisome. Our presents also have more thought to them, and we are not over presenting to any one person in particular. Christmas comes once each year. It is not a surprise expense, and it shouldn’t be treated as one.

Have you gained control of your holiday spending in another way that may be helpful for others to know? Please share!