ARTICLE: How to create a Christmas budget and get the most out of your money this Christmas season

Christmas is rapidly approaching, and you are likely already thinking about Christmas shopping.

While “the most wonderful time of the year” is supposed to spark joy and peace for all, chances are this year you are feeling anything but… Thanks to the seemingly never-ending pandemic, possible unemployment or reduced income, and an uncertain economy, it is no wonder you are feeling stressed, both financially and mentally. If you haven’t already started planning for Christmas, now is the time.

Learn how to create a holiday budget for a credit-free Christmas and tackle your Christmas gift list worry-free.

Step 1: Assess your financial situation

Before you can narrow down your holiday budget, you must first assess your financial situation to understand just how much you have currently saved and how much you intend on saving from now until Christmas. This is also a good time to see how much you spent last year (and even the year before if possible) to pinpoint any areas that you can tweak, reduce, or maintain.

Step 2: Make your list and check it twice

Take this moment to make a complete list of all the people you intend to buy gifts for (family, friends, teachers, co-workers, etc.), what decorations you need to buy, a rough holiday meal plan, and anything else you can think of. Think back on years prior to see if you are missing anyone or if there’s anyone you can remove from your list this year (like that friend you continually give gifts to but who never reciprocates…lol). This is a strange year, and it is okay if you need to trim your list down to not go into holiday debt!

Step 3: Break your budget down

Now that you know where you plan on spending your money this year, it is time to put a cedi or dollar amount to each category and break your budget down:

Gifts (break this down even further by allotting a cedi or dollar amount to each individual person)

1. Food
2. Decorations
3. Attire/Clothing 
4. Donations
5. Entertainment/Fun Activities
6. Miscellaneous

And for all you parents out there, the Center for Financial Literacy Education Africa has a cool trick for figuring out how much to spend on each child. To make it fair for the older children (whose shopping lists inevitably become more expensive as they get older due to larger clothing sizes, more technology, etc.), we budget a certain amount per child based on their age rather than the same amount per child. Learn how we do this simple calculation. Get in touch via info@cfleafrica.org.

Step 4: Do your research and plan ahead

To avoid overspending, take a few days to research your gifts at home before you hit the mall, local boutiques, or online stores. Plan ahead for upcoming sales (like Black Friday) when your items might be cheaper. Once you have your shopping list ready, schedule a day or two to get that shopping done.

PKANified Tip: Make sure to eat ahead of time to avoid shopping on an empty stomach and spending extra money at the food court… lol

Step 5: Be honest

If the holidays have you feeling anxious or stressed more than usual, we encourage you to talk to someone you trust. Chances are, they are feeling the same way as you!

If gifts aren’t on your cards this year or you can’t afford to host a big family dinner, you need to be honest with yourself and your loved ones. Explain where you are financially and have a conversation about ways you all can work together to lighten the financial burden on your shoulders.

There are lots of different ways you can save money during the holidays while still spreading that Christmas cheer!

Sending you lots of love 🙂

By: Peter Kwadwo Asare Nyarko

Peter Kwadwo Asare Nyarko is an Award-Winning Financial Literacy Advocate & Educator, Certified Personal Finance Coach, Business and Entrepreneurial Consultant, and Author. He is the Executive Director, Center for Financial Literacy Education – CFLE Africa (a not-for-profit financial literacy organization that is empowering, educating and teaching Africans especially young Africans to make sound financial decisions, save and invest wisely, plan for their future and to live a successful and happy lives).

He is the Founder and Lead Consultant, PKAN Capital Consulting (a personal finance, group financial planning, business development, and planning firm). Peter is the Lead, The Improving Financial Awareness and Financial Literacy Movement in Ghana and Lead TFAF Ambassador in Africa.

As a financial literacy advocate and crusader, Peter uses and maximises his God-given talent of speaking, writing, and serving people as he continuously gives advice and talks to people in all walks of life. He has the mission of empowering and educating his generation, focusing on financial management, business development, and investments to help them build and achieve success and happiness.