There’s Still Time To Set Up Your Holiday Financial Plan

With less than a month until Christmas, it's not too late to get all your shopping done and stick to a strict budget.

See: How 2020 Changed the Way We Look At Money

Budgets may be even stricter, though, after a year full of job losses and stress-induced online binge shopping. But that doesn't mean you can't make it a special holiday for your loved ones (and yourself).

Make the most of this new era of online deals -- without overspending.

Last updated: Dec. 2, 2020

Set a Holiday Spending Budget

To set a budget, you need to look critically at your current financial situation. Do you usually have money left over after you pay your bills? And, more importantly, do you have a strong emergency fund in case of financial pitfalls?

If your answer was yes to both of these questions, then you have some wiggle room for a bigger holiday budget. If not, you'll have to get craftier when it comes to gifting this year.

To make your budget, first determine the overall amount you can spare toward gifts. Then, you can narrow it down by person; with the people closest to you likely receiving the most expensive gifts. After outlining how much you want to spend on each person, adjust your budget as needed -- and don't forget that the biggest gift you can give yourself is coming out of the holidays debt-free.

Budgeting Guide: How To Create a Budget You Can Live With

Make Your List -- What Are You Buying?

Now that you know who you're shopping for, you can figure out what exactly you need to buy. This can be the hardest and most tedious part of the process.

The Amazon Gift Finder is a good tool to use -- especially if you have Prime and won't have to pay extra for shipping costs. You can sort by the amount you're willing to spend, whether it's $10, $30, $50, $100 or more. Etsy also has a gift finder and is typically better for more personalized, thoughtful gifts -- plus you'll be supporting small businesses.

Keep a running list of ideas that fall in your budget range for each person, and try to refrain from buying anything until your list is complete.

Check It Twice -- Does It Align With Your Budget?

Make sure your final gift ideas are in line with your overall budget. If you decide to spend more than you allocated on a specific person, you'll have to take that money out of somewhere else in the budget. The important part is that you're sticking to the original number you set for how much you can spend this holiday season.

If you're also planning to do some in-person shopping, you should leave yourself a cushion of cash between your online purchases and your max spending amount.

Check Out: The Best Post-Black Friday Holiday Deals

Take Shipping and Sales Tax Into Account

Taxes and shipping tend to add a lot to the sticker prices of otherwise-affordable online purchases. So before you check off all the items on your list, make sure you won't be spending way off your target in shipping costs.

To best calculate this, go through the steps of buying the product without actually buying it, and use the final purchase amount as the deciding factor. This is especially important for big buys where the sales tax will add $20-plus to the price of the item.

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About the Author

Levi Leidy

Levi joined GOBankingRates in 2019. He's found success in financial, political and military lifestyle writing, with work appearing on MSN, Yahoo Finance, OurMilitary.com and more. With a background in narrative writing, he enjoys turning interesting conversations into impactful content.

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