A good budget isn’t a “set it and forget it” type of deal. For a budget to work, it has to be a lifestyle, so it must evolve with your life. Each month, you have different needs and expenses—we all do. In order for your zero-based budget to be successful, you need to consider what extra costs will come your way in the next 30 days.

December is known for being particularly expensive! In December, there are so many obligations and expectations, it’s easy to get caught up in it all and spend lots of money. However, stick to your financial goals by budgeting for each cost category and planning way ahead. Here’s what you need to budget for in December:

Things to Budget for in December

Christmas Gifts

Maybe you’re someone who gets Christmas gifts really early or maybe you spread out the gift-buying throughout the whole year. (Smart!) If you’re like a lot of the population, though, you’re waiting until after Thanksgiving! That means, you need to have money set aside for Christmas gifts. Here’s how you can keep control of your gift buying:

Determine where you’re more likely to impulse buy—online or in stores? Avoid the one that causes you to overspend.
Plan out your gifts and add up the total cost beforehand. Then, when you go shopping, stick to the list!
Find an accountability partner that will help keep you on track with your budget and gift list.
Cut out extended family. If you’re struggling with money, don’t feel obligated to find room in the budget for second cousins and co-workers. Stick to the people who matter most. (A nice handwritten card will be sufficient if you really feel like giving to others outside your family!)
Remember that your kids don’t need the latest and greatest. Be thoughtful and intentional, but don’t break the bank. Learn more about how to say no to your kids here.
Start a sinking fund right away in January to ease the burden of Christmas gift buying next year!

Christmas Decor

Christmas decorations will be all over the stores. If you plan to purchase any decor, make sure that’s budgeted in. Don’t throw a decoration into your grocery cart here and there and categorize it with food. That’s a good way to break your budget! Additionally, if you plan on buying a live tree, you’ll need that whole experience on your spreadsheet. Luckily, there are a few ways to save money this Christmas:

Remember that decorations aren’t necessary, especially if you already have some at home. If this is your first time in a house and you don’t have any decor, know that it’s okay to start small and build slowly over the years. No need to have a shopping spree.
Look up inexpensive DIY decorations and make those instead! You could even craft them with your family for a fun Christmas memory too.
Find decorations at thrift stores and garage sales.
Hold off on the live tree for another year. A small faux tree will do just fine!

Family Activities

There are always lots of activities and events going on around town during Christmas! Whether it’s a special ice skating event, an extravagant parade, or a ride on a real-life Polar Express, Christmas excitement can be costly. Ensure whatever events you plan to attend are in your budget! Here are some tips for holiday family activities:

Choose just one activity to do with your family and make it special, rather than trying to make it to every event.
Opt for free activities like touring Christmas lights and community sponsored events.
Remember to budget not just for admission, but the cost of food, drinks, and other add-ons while you’re there.

Extra Travel

Traveling to family Christmas (or Christmases) is expensive. Gas prices, vehicle maintenance, airfare, and any other travel costs need to be included in your budget. Even if you don’t need to fly to another state to see your family, you’ll break your budget if you don’t plan for buying extra gas this time of year. These are a few ways you can save money on travel:

If you are flying to your destination, order your gifts online and have them shipped to your destination to save on baggage fees. Additionally, opt for inexpensive flights and only bring a carry-on.
Be mindful of what vehicle you take with you. Use the car that gets better gas mileage.
Price check various accommodations like hotels and Airbnbs to find the least expensive option. If you can, drive there and back in the same day to avoid overnight stay costs altogether.

Holiday Party Hosting

Whether you’re hosting your extended family or just your spouse and children, almost everyone has some holiday party costs. Between food, drinks, decor, gifts, games, invites, and the rest, hosting is costly. Make an itemized list of everything you need, price it out, and budget for that. If the total cost is too high, make cuts! You can find my whole list of ways to save money on holiday parties here, but I’ll give you a few highlights:

Get help with the meal by having a potluck style holiday party instead! Or, be untraditional and have soup, pasta, or a taco bar for a less expensive meal option.
Have everyone bring their own beverages.
Put a price limit on your gift exchange that suits everyone and their budgets.

Higher Utility Bills

Baby, it’s cold outside! As the temperature drops, heating bills will go up. Plan for that as well as annual maintenance on your HVAC. Hopefully, everything will be good to go, but you know how the first freeze can reveal lots of problems with your home and car. Here are some ways to save on utilities:

Call your gas company about getting on a budget plan, which makes your heating bill the same every month.
Drop your home temperature down at night and when you’re out of the house.
Start a sinking fund for regular home repairs that could come up.

Flu Season Supplies

It’s flu season too, and cold medicine, tissues, and urgent care trips aren’t cheap! Make sure you add a little to whatever category of your budget that includes doctor visits and medications. This is a small thing, but when you have a zero-based budget, even a few dollars can break your budget and put you behind for next month! There aren’t a lot of ways to save on cold medicine, but I’ll give you a couple tips:

Go with generic brands. They have the same ingredients as the name brand stuff!
Look out for coupons that can reduce the cost!
Use a sinking fund to offset medical costs throughout the year.
If your company offers HSAs, consider starting one! That way, you can have a medical sinking fund that’s tax-free! Here are eligible items and services that HSAs can cover.

New Year’s Eve Festivities

Remember that New Year’s Eve should be on your December budget, not your January one! You’ll actually pay for New Year’s festivities with your December paychecks, so don’t forget to add it to the budget if you plan to party. Here are a few ways to save money on New Year’s Eve:

Don’t go to the bars. The drinks are wildly expensive! Instead, opt for more intimate home parties where you can bring your own beverages.
Celebrate at home with your family with minimal supplies.
Go see a free fireworks show instead of attending a pricey NYE event.
Save the NYE vacations for another year. (Maybe after you get to baby step 4!)

Other Annual Budgeting Items to Look Out For:

Routine Car Maintenance
Income Tax preparation
Annual Insurance Costs
Birthdays and Anniversaries
Second Semester School Tuition and Fees
Annual Memberships

Keep December merry, bright, and free of money stress!

December can be an expensive month. When you go over budget, your serene holiday celebrations can become really stressful. Maintain the joy and magic of the season by planning ahead for a common budget buster.

You can find more budget busters on my blog, and if you need help creating your first budget, schedule a free session with me! We can discuss your fears and get you all set up to not just win this Christmas, but win with your finances every month of the year!