I am so, so excited and happy to try something new here and welcome a new friend! Her name is Stephanie and like me she has a passion, but it isn’t for cooking…it is for budgeting! I, for one, am TERRIBLE..read that again..TERRIBLE at budgeting of any kind. And guess when it gets even worse? THE HOLIDAYS! 

Well my friends, have no fear! Stephanie is here to give us some tips on how to stay on track this holiday season! 

BRB..I am going to have to read this every morning for the rest of forever haha


The desire to make the holidays perfect is heightened when you are in the thick of holiday shopping. With a game system under one arm, a teddy bear clenched in your teeth, clothes draped over your other arm and credit card in hand- you are either incredibly stressed or drunk with glee that this is truly the most wonderful time of the year… or is it just me?

According to an article by Money Magazine in 2016, the average American added more than one thousand dollars in debt due to holiday spending. Now, that’s not the total of what they spent, but how much more than they could afford that ended up on credit cards. In 2017 credit card debt due to holiday spending climbed $11.2 billion! I thought about that for a second and then decided to see how I stacked up. I looked up my previous year’s statements and found that I was far worse off. My over the limit holiday spending was a lot closer to $4,000.

I am a giver and it makes me happiest when I can splurge on my loved ones, but I realized I needed to change since that came to the detriment of my finances. This article is for anyone who loves to give during the holiday season but went further into debt last year than they meant to. Here is a simple 4 step process to keep you on track this holiday season:

Step 1: Figure out what your starting point is:

There is that saying, “People don’t plan to fail, they fail to plan.” And it is true, so to begin planning we need to write down what is included in our holiday celebrations. It is our starting point, so here are some questions to brainstorm and make a list:

  • How much cash is available?
  • Who do you want to give gifts to?
  • Are you going to travel?
  • Are you hosting parties or bringing something to parties you’re attending?
  • Decorations and Christmas tree expenses
  • Holiday related events

Step 2: Prepare a Budget

Now that we have an idea of what we want to accomplish during the holiday festivities, we must prepare a budget. After taking into consideration all our normal month to month expenses, and accounting for the increase in electric and heating, we must figure out how much cash we have available.

Now take that cash out of the bank and use the envelope system. There are two reasons the envelope system works. The first is because you have put all your spending cash into the envelope when you’ve used it up it is literally gone, and you can’t spend more. The second is there is an emotional reaction that is triggered in your brain when you use cash. It is harder to spend than swiping your card. It is also harder to talk yourself into using more cash than it is to tell yourself it is okay to use $100 more of credit. Just make sure only holiday expenses are being used with the holiday cash envelope.

With what cash we have, we will separate it into categories:

ENVELOPE 1-GIFTS: How many people are we purchasing gifts for? How much can we spend per person? Don’t forget to put a small budget for unexpected gifts- if someone gets you something, you want to have something on hand that you can give back, without appearing as if you may not have included them on your holiday list. Think about how you can buy a family gift rather than giving your sister, her husband, and her two children four separate gifts. Speak with your family about having a white elephant exchange or agreeing only to buy gifts for children.

Also, a word to the wise for people who love to regift: put a sticky note on the item with who gave it to you and who was present to see you receive it. I once got a gift I saw my sister receive! For me it was funny, but a sticky note would have avoided that faux paux.

ENVELOPE 2-TRAVEL: Will you be traveling this holiday season? Things to consider are flight costs, gas, and hotels…these can quickly add up, especially when added on top of all the other holiday expenses. If you absolutely must use a credit card, use one with 0% APR and then make a payment plan to pay it off within the time frame they’ve given you, sometimes these are for 18 months or longer. But make sure you stick to your plan, unfortunately over 25% of Americans don’t pay it off in time.

ENVELOPE 3-HOLIDAY RELATED EVENTS: There are so many festive activities, company holiday parties, and family events going on this time of year. A comprehensive list can be found on the calendar of this website, but before you click “attending” to all the events, take a moment to think about your wallet. You can save some money by refraining from eating at special events, especially if you have children, ensuring they’ve eaten prior to leaving the house can save you bundles, while still allowing you to enjoy the time with them and the excitement of the event.

Also, and this was a hard one for me, it is okay to say NO. You do not have to attend every event. They will be there next year, and if they aren’t, they probably weren’t that good to begin with. There is no reason for you to be paying interest for months into 2019 for something you may not even remember.

ENVELOPE 4-HOSTING/ ATTENDING HOLIDAY PARTIES: If you are hosting holiday meals or events, this can easily eat into your cash supply. Make sure that you have a separate envelope for these expenses and you don’t use this cash for gifts resulting in you needing to pull out the plastic.



When I first did this a few years ago, this was the point where I said— I don’t have the cash to fill all my envelopes, what am I going to do? Well, here are a few ideas that can help. The holiday season is really about spending time with loved ones and cherishing special moments. So why not put the emphasis there rather than material things.

  • Start a new family tradition: Most holiday traditions are tied to our consumer-based culture. But there is a plethora of other ways to make memories with your family:
    • Gather the family together to bake cookies. This is a lower-cost activity that hits almost all of our targets. It provides time to spend with our loved ones, each person can bring their own ingredients for their favorite cookies saving on cost, deliciousness is sampled (let’s not forget that part!), and the surplus cookies can be given as gifts to relatives, co-workers, or brought as your contribution to holiday parties.
    • Have a day to make ornaments: children will enjoy the hands-on fun of this activity; it will mean less spent on decorations at the store; and is a phenomenal gift for grandparents. Tins for the aforementioned cookies could also be brought and decorated for a fun family time.
    • Volunteer at an organization of your choice. There are so many people whose holiday would be immensely better if your family thought of them this holiday season.

Step 4: Plan for Next Year

Now that we know how much our holiday expenses are, and how to keep them down, we can plan for the future to make next year even more manageable. An easy way is to start a Holiday Savings Account. Just take your budget divide it by twelve and put that amount away every month for one year. When this season rolls around next year, you won’t have to worry about debt at all. All the money that would have gone into paying interest can now be utilized on an emergency fund, retirement plan, investment, family vacations or more holiday gifts!!