Budgets are a great tool for the holidays to ensure you don’t overspend. As boring as they sound, they can be a very effective tool if you choose to use it!

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If you got a little sweaty opening this post, you can relax. I promise it isn’t as intimidating as you think! And it certainly isn’t as scary to make a budget as it is when you don’t make one, and you’re staring at your bank account and credit card statements after the holidays wondering how you spent so much money and wondering where it all went.

I never made a holiday budget until my husband and I decided a few years ago that we were really sick and tired of paying for Christmas well into spring when the snow was already melted (and we live in Minnesota, so it takes a long time for the snow to melt!).

We decided last year that we were going to pay cash for every single holiday purchase. Gifts, events, decorations, donations–all of it. No more using credit to overindulge. We realized that overindulgence isn’t really what we believe the holidays are about anyway, so it made sense to start living those values more authentically.

With our daughter getting to the age where she was going to start understanding what the holidays are and making core memories, we knew we had to change how we were handling the season. Especially if we wanted her to understand that the holidays are more than just gift giving and Santa, despite what story marketing tries to sell us.

So, one afternoon we grabbed some coffee from our favorite coffee shop, sat at our kitchen table, plugged our toddler into Bluey, looked at all of our upcoming expenses and income, and put together a budget for the holidays based on what we could (and wanted to) afford and spend.

It took almost two hours with some interruptions, but having a plan in place felt really good and was time well spent. It boosted our confidence around spending and made us feel responsible and grown-up. And what felt even better was knowing we wouldn’t be paying for Christmas after Christmas was already long taken down and put away.

I thought it might be helpful to share what our holiday budget is this year and what it looks like so you can see exactly how we use it to help control our spending. You can see a quick view of it below, and even print a blank version for free for you your family here.

I also want to share some things that have helped us create and shape our budget when it comes to the holidays as we put it together.

Build your budget before you start your shopping. I know it’s tempting to start buying holiday stuff, especially when it’s all glittery and sparkly in the store, staged perfectly with excellent lighting, holiday music playing above, and the scent of Christmas Tree Farm or Cinnamon Yule wafting from the candle section.

However, this is where overspending starts. Mindlessly buying with no plan for what you purchasing is a fast way to spend money you either don’t have or didn’t need to spend. Don’t just buy to buy things. Having a budget is having a plan. If you fail to plan, you plan to fail.

You can choose not to buy presents for people. I remember when I was a kid, probably about 8 years old, and my aunt announced to the room during their turn for gift giving that they chose to only buy for the kids this Christmas. I looked around the room as they began to hand their gifts out. No one batted an eyelash or made any fuss, but my small mind was completely blown. Could she do that? She didn’t buy gifts for everyone? Would she get in trouble for not buying her brothers and their spouses, or my Grandma, gifts? I laugh now at this core memory because I truly thought it was a crazy concept.

Now as an adult I look back at her with admiration. This is actually genius. Adults are not only kind of a pain to buy for, but very few of them actually need more “stuff.” And kid toys are VERY expensive, especially if you don’t have kids and aren’t used to the price tag. It’s also difficult to know what they already have or what they might enjoy.

My husband and I have a discussion each year with our extended families to talk about gift giving and specifically if we are going to buy for adults or not. This year, we set a dollar amount limit for our nieces and nephews, and we are gifting very modest, practical items to the adults in our lives, like gift cards, cash, and favorite homemade baked goods. I’ve never met anyone who doesn’t appreciate a gift card for groceries, or to their favorite coffee shop, or cold hard cash. And you’ll never see me turn down a home baked cookie.

Unsubscribe from White Elephant gifts. I know this is trendy and can be super hilarious. I’ll never forget the time I received a hideous rooster cookie jar as a White Elephant gift. However. This is super pointless spending and a major waste to your budget. If you aren’t re-purposing something you already have or spending zero extra dollars, cut it out. Or, if you do really feel strongly about it, find somewhere else to trim in your budget so you can still partake, but keep it as inexpensive as you possibly can.

Take a close look at what the holidays mean to you. This one might be the most important when you create your holiday budget. When you think about your favorite Christmases in the past, what about them do you remember and cherish?

Do you remember the number of gifts you received? Or do you remember baking cookies with your mom and Nana dancing around the kitchen singing Christmas carols? Do you remember how much money someone spent on you for a gift? Or do you remember the beautiful handmade ornament that you still have from your childhood that is your favorite to hang on the tree each year?

Is it time with family you love, sitting around in pajamas drinking some coffee or red wine, laughing and reminiscing, while you all play a board game…or spending it with strangers at an extravagant black tie holiday party? Setting up your favorite timeless holiday decorations that you look forward to unboxing each season…or having the latest season’s color scheme and a Pinterest worthy decorated home?

There truly is no wrong answer. But you do need to be honest about what you want to spend your money on while you’re creating a budget, and plan accordingly. It is your hard earned money and you should spend it how you want to, whatever that looks like for you and your family.

From the bottom of my heart, I wish you the happiest holidays to you and your family! I hope this helps you save some money, spend wisely, and have less stress about spending during the holidays! They are meant to be enjoyed, after all.