Week 2: Budgeting for Holiday Expenses
Hello and welcome to the Cultivating a Minimalist Holiday online course. I’m Lauren Hooper, your teacher and guide in this course and the owner of The Minimalist Wallet, a financial coaching and home organization company that provides 1:1 coaching, online courses, and tools to help individuals align their money and home with their values so that they can live more ethical, sustainable, and intentional lives.
The time between Halloween and New Year’s Day (officially known as the Holiday Season) is often the most expensive, stressful, and hectic time of year. This 8-week course will guide you through the process of bringing peace and joy into your holiday season.
I’m excited for you to join me as I cover:
how to make the decision to participate thoughtfully in Black Friday and/or Cyber Monday sales or opt out(side)
how to plan and acquire gifts in a way that aligns with your values and goals
how to slow down, remove as many unnecessary things from your to-do list as possible, and enjoy a peaceful & joyful holiday
…and much more!
By the end of course, you will have a whole new way to approach the holidays and be ready to start thinking about how to bring more intentionality into the new year!
We are officially in Week 2 of the Cultivating a Minimalist Holiday online course, arguably my favorite week of the course because we are talking about MONEY - money!
As a financial coach who works with clients to set and meet money goals, I get so excited to extend my expertise in this area into my holiday course. Just like how used last week to lay the foundation of our holiday by setting our intentions, we will reinforce that foundation by setting a financial plan for the holiday season. And I want us to discuss this early in the course not just because it is determines what we can and cannot do, but because I don’t believe that thinking about money all the time is how we live a intentional life. That might come as a surprise to you because I love to talk about budgets and low-risk investments and economics and all that. But that’s just because it’s an interest of mine. The average person does not need to and probably shouldn’t have money on their mind all the time. As the Snoop Dogg song Gin & Juice chorus goes - with my mind on my money and my money on my mind…..that’s not meant to be advice for how to live a joyful, content life. BUT we do need to think about it sometimes, in concentrated moments where we get curious about how and what we spend on, think about how that aids in our fulfillment, and set some habits for how we can use our money wisely in the future. If we go to the grocery store once/week knowing how much we can spend and we stay within the amount to buy everything we need for the next 7 days, we get to spend the next 7 days not thinking about money! And that’s how Budgeting for Holiday Expenses works. We’re gonna take some concentrated time right now to think through all the details around holiday spending, make a plan that works within your financial constraints, and then go out into the world and enjoy the season without worry and without money on our minds!
Your first step is to pull up your financial records from last Oct-Dec whether that’s your budgetting software or bank statements and start to write down all the expenses related to the holiday season.
You can use a pen and paper or open up a Google Doc or use your digital or printed companion workbook that I’ve designed exactly for this course.
I generally break down holiday expenses into 5 categories: food, activities/events, decorations, travel, and gifts. So to the best of your abilities, divide up all of last year’s expenses amongst these 5 categories. Add it all up and you have your total for last year’s spending.
Now the whole point of reviewing last year’s expenses is so can learn from it. On a macro level at the end of every holiday season, I review how things went in terms of budgeting and planning and activities. I write a note to myself and then I schedule for that note to pop up as reminder in October so I can use it for my upcoming holiday plans. And on a micro level, we’re doing that right now with your expenses.
Review everything you wrote down and decide if there is anything extra you want to add for this year. This is the fun part so really take some time with it.
Gifts tend to me the area that people want the most freedom to spend on so this is a great category to start with. Things to include with gifts are the cost of any wrapping materials and shipping/postage. If you take yearly photos, print holiday cards, and mail them out, all that cost can be included in gifts. Don’t forget all the people that help make your life better throughout the year - teachers, bus drivers, employees and coworkers, anyone who regularly provides a service to you in your home like a house cleaner or yard crew.
Food isn’t just going to be Thanksgiving and Christmas dinner, but the meal you brought to the potluck or the gingerbread cookie making kit you bought for your kids.
Activities/events are an area we often forget about. It’s the tickets to the Christmas market or the ice skating rink. The Nutcracker performance put on by the local ballet company. Registering for a Turkey Trot 5k. The light installation at the botanical gardens or zoo. Work parties or charity galas that have a ticket cost. Maybe a new outfit if you HAVE to.
Decorations can also get pricey when we aren’t paying attention. If you are someone that purchases a live tree, wreaths, or garland, don’t forget to factoring that in. Batteries for lights and other decor are another small detail to consider.
Travel can feel like an obvious category, but the extra miles you put on a vehicle from just doing more activities mean your fuel costs will go up.
And now we get to write down the things that maybe didn’t work that you don’t want to include or don’t need to include for this year. This part is also fun because we get the opportunity to let go of things that aren’t working. One of my notes from last year is about how I need to stop buying gingerbread house decorating kits for my kids because they get mad at the difficulty and they really just want to eat the candy. So this year I will just buy the ingredients for gingerbread cookies which includes cookie cutters so I will save some money and save myself from a headache while teaching my kids how to bake gingerbread cookies.
Your last step is adding up what your ideal holiday expense budget is for 2024. Does this number feel doable or is it more aspirational than actual?
Now before you spiral because your current budgetary restraints don’t allow for the ideal holiday spending, you have the opportunity right now to make it happen for next year. I am the QUEEN of there is always next year. Rather than feel stressed or shamed or disappointed that I can’t do something in the current season, I make a plan for how to make it happen in the future.
Have you ever heard of a sinking fund? A sinking fund is a term for funds that are saved up for an upcoming planned expense, often something occurring regularly and often related to several different expenses. A person may have a sinking fund that combines their auto insurance or yearly homeowner’s association fee. Sinking funds are great for back to school expenses or the annual vet bill for an examination, diagnostics, and flea/tick/and heart work prevention. And sinking funds are FANTASTIC for holiday expenses. Make a plan to start putting money away monthly in January 2025 to go towards your holiday expenses. You can pause this podcast right now to set up an automatic monthly transfer from checking to savings every month starting in January that splits your goal spending into 10 increments. Think about how amazing it will be feel in November 2025 when you have all this money saved up and ready to go for your dream holiday.
This year you may be practicing a little more frugality. I promise you everything that you will learn in coming weeks will make your frugal holiday fun and you may decide you like all the frugal options and stick with them in future years. But we can also set you up for less stress in 2025 if you making a saving plan now.
Now back to your frugal, but fun 2024 holiday!
I think it’s human nature to want more than we have. Doing more, attaining more, being more, it’s growth for us. And it’s not necessarily a bad thing! But at the same time, we’re also growing and bettering ourself when we practice creativity and contentment - the twin pillars of a frugal holiday. You took the time to write down your intentions for this holiday season and keeping them in mind as you make a spending plan will really ground that experience.
It can be easy to get caught up in everything you want to do when you’re dreaming up your ideal holiday season. But if you compare what you wrote down in Week 1 with what you want to add or subtract to 2024, you may find some discrepancies.
So this is where we go back to the workbook to write down the things that are essential to our holiday season. Don't forget to assign dollar amounts to every one of those items and/or categories. You may also want to consider ranking items in each category by importance. And finally you add everything up to ensure it meets what you can allowably spend this year, adjusting accordingly if necessary.
Now that you have your spending plan for the 2024 holiday season, you can go out into the world and start making your holiday dreams a reality!
I hope you have are feeling excited about the prospect of having a detailed spending plan this year and potentially a full funded 2025 holiday budget if you have taken steps to start saving towards it already.
Next week, we’re talking about how we decide if we will opt in or out of Black Friday and Cyber Monday.
Thank you again for being here—as make this your best holiday season yet, together!
