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And in the “blink of an eye” we are back in the season most desired by the little ones and perhaps the most “feared” by adults: Christmas. Because? This festive season entails a considerable financial effort for many families, and managing the family budget for christmasturns out to be an exercise that has to be done in a creative way.
There is no greater desire for parents than to contribute to their children having a happy and fulfilling Christmas. Of course, this is not always synonymous with gifts, but sometimes even a full Christmas table can significantly affect the family budget.
So, so that you can prepare in time, we have some advice.
6 tips to prepare the family budget for Christmas
Try not to include the Christmas allowance (or include only part of it)
the Christmas allowance It’s a workers’ right in Portugal, guaranteed by the Labor Code. This subsidy works, in practice, as a “extra salary” given to workers at the end of the year. As a rule, this value helps many people: it is possible to settle annual expenses before the end of the year and pay extra costs with end-of-year celebrations, for example.
We advise you not to include your entire allowance in your family budget for Christmas, take the opportunity to monetize it. As? This is a good opportunity to, as the good rules of personal finance dictate, reinforce the emergency fund or invest part in a Savings Certificate (mainly because these State products are reacting to the increase in Euribor), for example.
Plan ahead to ensure budget balance
Even at Christmas it is necessary to have rules and limits so that you don’t put your financial situation at risk, so this is not the time to stop thinking about saving. For this, we advise you to plan your Christmas, dinner, the gifts you are going to give, to whom you are going to give them and the total budget available.
So that your savings are not forgotten, we leave you with a tested formula that has proven to be effective for many other people: the 50/30/20 formula.
This formula determines maximum percentages for spending (essential and non-essential) as well as a minimum percentage for saving.
50% of your salary must be allocated to essential expenses
Essential expenses correspond to fixed expenses, those that you really cannot escape and that have to be covered every month.
This type of expense includes housing expenses, such as rent or payment of home loan installments, as well as expenses with food, fuel for the car, passes, telephone, internet, electricity, water and gas.
30% for non-essential expenses
Note that 30% is really the maximum amount you can spend on clothes in restaurants, movies, concerts, trips and other leisure activities. That is, in everything that is not fixed and can be adjusted, as long as it does not exceed this maximum ceiling of 30%.
20% to save
This is the minimum amount of your monthly income that must be allocated to savings.
For example, if you earn 1,500 euros a month, 300 euros shouldn’t come out of your pocket except for that emergency fund, afteriI’m on deadlineor any other savings instrument of your choice.
Make a list of all the people you are going to give gifts to.
Sit down and think about who you would really like to grace this Christmas with a gift. This list of people will allow you to outline a strategy, plan and organize a reasonable budget that is adequate to your possibilities.
Sometimes narrowing down the list can be tricky, but try to figure out if it really makes sense to include all these people on the list. Also, you are likely to manage your family Christmas budget better the more restricted the group.
Know how much you plan to spend on each person’s gift
We suggest that, in order to control your family Christmas budget, you designate a value for each person and then try to find something that fits your personal taste and also the assigned value.
All these lists will give you an advance control over the total amount spent on gifts.
Be creative when planning your gifts
Why not think of something that is really synonymous with the person’s personality and offer something in that sense, why not something made by yourself? For example, a photo album since you’ve known the person, a jam made by you. In fact, there are many options to put a smile on the faces of those who are most dear to us, not everything has to be of high value.
Find out how many people will sit at your table for Christmas dinner
It’s not just gifts that we spend part of our Christmas budget on. After all, will Christmas dinner be at your house or at a family member’s house? If it’s yours, count on a large amount directed only to the foods that we like so much on the night before and on Christmas day.
Check if there is the possibility that everyone who participates in the Christmas dinner can contribute with some food, or with some amount of money, so that your budget is not so “heavy”. After all, when everyone helps everything becomes easier.
Don’t forget your monthly fixed expenses
Imbued with the Christmas spirit, the probability of being more predisposed to spend is high. Therefore, you must first ensure that all your fixed monthly expenses are covered. They should, in fact, be your priority, as they are the ones that guarantee your well-being and that of your family. In addition, credits, whatever their type, must be treated with the utmost responsibility so that you never get into a debt spiral.
We know that Christmas is a time of extra spending, so preparing your family budget for Christmas can be an essential tool to ensure you have a Merry Christmas and keep your finances in balance.
Article originally published in December 2021. Updated in November 2022🇧🇷