🎄🎄Create a holiday budget plan to end the year. 🎄🎄
The holidays are approaching and the pressure to make a
memorable experience is rising. If you are a parent like me, your kids have already
given you an 18-page Santa list of items that consist of everything from 1$
slime to a 500$ plus game system.
Not forgetting, after the holidays introduces a new year
and a full reset. As an accountant, bringing in the New Year on a good leg is
important. The best way to ensure a happy wallet and a successful start to the
new year is to create a budget plan that guides you through the traffic of
holiday gifting and hosting.
Are you struggling to create a holiday budget plan that
will organize your expenses and build your savings?
There are no struggles here. I will help you create a
user-friendly budget that helps you thrive during the holidays. After reading
this plan you will understand how much money you can save vs. splurge and find ways
to cut expenses.
Here are my tips and input on creating a holiday budget
plan. Let us dive in!
Budget Method
A budget method is a strategy you want to follow when
creating and sticking with your budget. This budget plan will help you pre-plan
for the holidays by cutting expenses where you can and planning gifting
budgets.
Budget Plan
A budget plan should be a commitment you make towards your
finances. A budget plan is a plan based on income and expenses. Budget plans
are helpful to list all income and all necessary costs, then from the remaining
decide what you can afford and what must go. It may seem like a lot, but as a
financial coach, I can give you all the tips for success.
A budget plan is useful for many reasons. For example, a
budget plan is useful for mapping your income and helps you create a plan for
financial freedom. A budget plan can also help you track your savings for a
major upcoming life event. Either way, everyone should have a budget plan no
matter how little or large the income. Overall, this budget plan helps you
create a visual guideline to focus on three main topics:
1. Your
monthly income
2. Your
monthly expenditure
3. Your
monthly savings
1. Income
To create a budget, we must organize income and expenses.
The first step of this plan is to strictly focus on
forecasting your income for the month. This section captures details of your
income to help you know how much money your budget is starting with to spend
for the month. On your budget plan, include after-taxes income, from
employment, self-employment, dividends (optional), gifts, etc.
For the holidays if you saved during the year for these
festivities as I did, you can include your Thanksgiving/ Christmas/New Year's
savings balance.
Hear me out!
Let us review my client Tina’s budget plan.
Tina included all income for the month. She listed her pay
from her full-time salon services, beauty item sales, and anything Tina is
promised income for including the 500 dollars saved for Christmas. A bad
example to include is the lottery Tina hopes will win. Unless you have the
winning numbers in hand, do not include this income because it is a gamble.
Once all income is listed, combine all the sources, and complete your first
step.
Here’s how Tina’s budget plan is looking so far:
2. Expenses
Now that Tina’s income is calculated, we can begin to build
the rest of the plan. This section will focus on expenses, and the two
categories of expenditure:
a. Necessity expenses – Items that can get
reduced but cannot live without
b. Lifestyle expenses – Holiday prep/gifting
I define the two expense categories so that once I build
out my 50 30 20, I know how much and what I distribute expenses to.
Necessary expenses
In this section of the budget, you want to focus on
necessary items. Items such as rent/ mortgage, utilities, food, health
insurance, etc. These items absolutely cannot be lived without. I am writing
out these expenses first because thinking back to my budget strategy I know
these cost accounts for half, or 50 % of the income previously counted.
Lifestyle expenses
Lifestyle expenses are costs that are related to items that
are outside of necessary expenses. I like to think these costs are usually an
item you want instead of a need. These expenses can be lived without or reduced
for a whole month cycle or longer. These expenses will have no impact on your
overall well-being. I am writing out these expenses because my budget strategy
states these costs should not account for more than 30% of the income
previously counted.
For the holidays a good rule is to make sure you are not
over budget on what savings you have, or the amount spent on lifestyle items
such as holiday gifts and décor.
Another way to keep your savings and debt in check during
the holidays is to significantly reduce or place subscriptions on hold for the
month. Good examples are certain subscriptions, weekly mimosas at Sunday
brunch, vacationing, and buying lifestyle items. I promise a new pair of 400$
sunshades can wait until your budget and savings allow those items to be
purchased.
Setting goals is important when it comes to the budget plan.
Remember you don’t want to go over your strategy method allotted cost. The Pink
Coin did an amazing job keeping Tina on track and outlining her plans to end
her year succesfully.
3. Savings/debt
Now your savings section. For some budgets, depending on
the circumstance, you may need to allot some income to debt repayment and some
for savings. For this example, we want to focus on savings. When your income is
collected, I say to pay yourself first. Calculate 20 % and put it in a savings
account or cash in an envelope. Whatever you choose, know that your savings are
a cushion and a start to being financially fit.
Let’s think back to Tina’s plan. Tina is a serial entrepreneur
and relies on a cushioned savings account. So even during the holidays, we aim
for 20% of savings. Tina always makes sure to pay herself first.
4. Strategy
50 30 20
Once all items are aligned, you can
apply the rules of the strategy. From there determine if you are over on
your strategy or have excess funds.
Let's check how Tina’s budget is going.
Takeaway: Overall, the goal of a budget plan is to map a
financial decision for your monthly income. This way you can know where your
money is going, and not guess where it went. Holiday gifting should be split by
what your budget can allow.
Holiday
budgeting ideas
Some ways to save this holiday season include reducing other lifestyle items, taking on extra work to revamp holiday losses, and Selling clothes. or items to get extra cash for the holidays or creating and gifting low-cost DIY items that give a heartfelt experience. No matter the misconception budgeting can still help you create a great experience and memorable moments.
Churches and cathedrals typically have free Christmas plays,
and light shows which makes a great low-cost experience while enjoying the festivals
of the holidays.
Homemade goodies such as pies and cookies can help save on
holiday food costs. Potluck-style gatherings can also ensure guests share the
cost of food and drinks. Mixing cocktails and egg nogg instead of the pre-made
alternatives could help save some coins.
Reminder during the traffic of the holidays the next huge
event is New Years and Federal tax submissions. The Pink Coin accountancy becomes
busy but we will always have appointments available to schedule a financial
forecasting or federal taxes prepping.
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Keep getting financially fit with The Pink Coin!!!!
- Coach Bre
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