Christmas Budget

The best way to save money during the holidays is to create a Christmas budget.

We all know money doesn't grow on trees but during the holiday season it's easy to wish it did. You don't have to go broke to have a wonderful Christmas.

Set a budget and stick with it. You may not be able to be as generous as you would like to be, but you won't have to be afraid to open your mailbox in the months to follow, fearing the credit card bills that may be lurking there.

The first step in creating a Christmas budget is determining how much money you can realistically afford to spend. This is when it is really important to be honest with yourself.

Once you have determined the total amount of money you can spend, break that total down into categories, for example:

• Gifts
• Food
• Decorations and Supplies

Decide how much of your overall Christmas budget you will spend in each category. The next step is to break down the budget for each spending category. For most people, gifts and food are the two biggest holiday expenses. Here are some tips to help you keep those big expenses under control.

Budget Your Christmas Shopping

It is not as difficult as you may think to budget for your holiday shopping. Decide on the total amount of money you would like to spend on gifts. When you create your Christmas gift list, divide that total among the gifts on your list.

As you shop, keep track of the actual amount you spend on each gift. If you realize that you have over-spent on a gift, try to compensate for that when you shop for the remaining gifts on your list. Tracking each individual expense in this way will help ensure that you stay within your overall budget.

Come up with alternatives to gifts. If you have friends, co-workers, neighbors or anybody else on your gift list that you can agree not to exchange gifts with it can be a huge money saver for everyone involved. Instead, try one of these ideas:

• Spend the day with your best friend baking Christmas cookies. Not only will you both wind up with an assortment of cookies to serve on Christmas Day, but you can't put a price on the quality time you spend together.

• Have a cookie exchange with your co-workers. Instead of exchanging gifts ask everyone to bring in enough of their favorite holiday cookie so that each co-worker gets a half dozen. Then set aside a lunch hour to exchange cookies and recipes. Everyone goes home with a lovely holiday cookie platter, lots of fun new recipes and some extra cash in their pocket.

• Chip in to donate to charity. If all of your neighbors took half the amount of money they would normally spend on gifts for each other it would add up to an impressive amount to donate to charity and everyone would cut their "neighbor gift" budget in half.

• If you have a large family with lots of young children buying gifts for all of those kids can get pretty expensive. Agree with your brothers and sisters that each of you will only buy gifts for your own children. Then pick a day that you can all spend together with the kids helping them make fun Christmas crafts. The memories you will create for them will last a lifetime.

Budget Your Christmas Menu

Gifts are not the only thing that cost money at Christmas time. Food is another big expense that could benefit from a budget. Decide on the total amount of money you would like to spend on your holiday food. When you create your Christmas menu, keep your budget in mind.

• Be realistic about how much you need. Do you really need to serve seven different side dishes or will three be plenty? It's easy to want to impress your guests with a spectacular holiday spread, but don't do it at the expense of your budget.

• Prioritize you menu items. If you start to go over your budget, remove low priority items from your list.

• Share the expense. You don't have to be Super Hostess. When Aunt Helen asks what she can bring to Christmas dinner, instead of saying "just bring yourself," say "it would be great if you could bring a pie."

Armed with the right tools and information, stick to your Christmas budget and enjoy your holidays as well as the months that follow.