How to Set a Realistic Budget for Christmas Shopping

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INSIDE: Christmas shopping can easily get out of hand. Learn how to set a Christmas budget so you can make it a great one without doing into debt.

You need a budget, especially at Christmas. Here’s how to set a Christmas budget for your family that works!

To set a Christmas budget, decide what you can afford to spend this Christmas

Knowing how to set a Christmas budget comes down to what you can comfortably afford. How much money do you make per month? Now subtract all your expenses? How much is left over? How much of the leftovers do you feel comfortable putting towards gifts? 

There’s no magic number for exactly how much you should spend on Christmas. Each family has a different budget and different circumstances. But, be reasonable. Don’t go into debt in order to buy gifts.  

Once you’ve come up with a number that is right for you, write it down and stick to it. If you want to buy a family member something special but it’s over budget, then either wait for it to go on sale or come up with a new plan. And don’t be so hard on yourself.

Avoid falling for the “perfect Christmas myth.” Your kids will be okay if they don’t get every single thing on their list. Don’t go over budget because you’re trying to make the holidays perfect. And it’s never a bad idea to teach your kids about a holiday budget.

  • Pro tip: You can still have a magical Christmas on a budget — get our tips on How to Do Christmas on a Budget.

If your budget is lower than you want it to be, consider ways you can make more money for Christmas.

Our best tips for staying on budget this Christmas

In order to set a Christmas budget and stick with it, try these tips…

Keep gift-giving simple 

When it comes to my extended family we’ve been doing Secret Santa style gift swaps for years. Not only does this reduce the amount of money that you need to spend, but it also reduces the stress of trying to come up with a thoughtful gift for every uncle and cousin that you only see twice a year. 

Make a list and stick to it

Once you’ve decided on a gift-giving strategy then you’ll know exactly who to need to buy gifts for. Create a list of names and determine how much you can budget for each person. Based on your list you can start brainstorming gifts that align with your budget. 

Give experiences, not things 

If you’re having trouble deciding what to give people for Christmas remember, give experiences, not things. Experiences are more meaningful then things and the memories you create from a good experience can truly last a lifetime. Passes to a museum, amusement park, or a gift card to a fantastic restaurant are great gift ideas. 

How to save money on Christmas gifts to stay on budget 

Between gift-giving and holiday entertaining, Christmas can get expensive. That’s why you set a Christmas budget to begin with. But, in addition, here are some gift-giving tips to help you stay on budget:

Follow the four gift rule

When it comes to the act of gift-giving, keep it simple. There are a ton of super fun gift-giving strategies that allow you to celebrate the tradition of giving without spending a fortune. My kids are still young but we’ve started practicing the four gift rule which is: 

  • Something you want
  • Something you need
  • Something you’ll wear
  • Something you’ll read

This is a great strategy to help keep you on budget while shopping for Christmas gifts. 

Give a gift card

Yes, you can argue that a gift card doesn’t qualify as a super thoughtful or meaningful gift. All I know is that I would prefer a gift card over an ugly sweater or smelly candle. Also, gift cards are a great way to stay on budget. All you have to do is pick an amount, or assign an amount that fits your budget. No waiting for a sale and no overspending necessary. 

Give a homemade gift for Christmas

Are you super artistic, an excellent baker, or a woodworking genius? Then consider giving a homemade gift to help you save money and stick to your Christmas budget.

There’s a reason why online marketplaces like Etsy are so popular. It’s because there’s a demand for beautiful homemade products. However, if the extent of your creativity involves a glue stick, macaroni, and glitter then perhaps this is not the budget-saving tip for you!

Advantages of shopping for Christmas all year 

If you’re a planner, this strategy could work for you. Although it’s strange to start to think about Christmas shopping in March or April, there are a lot of advantages when it comes to Christmas shopping all year, as opposed to saving it all for November or December. So, start celebrating Christmas in July and reap some of the financial and emotional benefits.

If you can wrap your head around the idea of shopping for Christmas gifts all year long then there are quite a few major advantages to doing it this way: 

It’s easier to stick to your Christmas budget

Can you even imagine the Christmas holidays without last-minute panic shopping? Even if you set a Christmas budget, it can easily get blown away when that happens.

When you break up your Christmas shopping over several months or even an entire year, you can make a plan. You can shop for items when you know they’re on sale, and you can take some time to save for things before making a purchase. This can help you avoid going into a ton of debt at Christmas time. 

According to a report by Statista titled, “U.S. Christmas Season,” the average American expects to spend $846 on Christmas gifts. If this seems accurate for you, then divide this by twelve months and you can set a ballpark budget of $70.50 per month. 

Early shopping means you can avoid the crowds 

While 64% of U.S. consumers purchase gifts online, many of us also find ourselves in a mall during the holidays. And, in my personal opinion, there is nothing worse than a crowded mall at Christmas. Everyone seems to be grumpy, in a rush, and deplete of holiday cheer. No thank you. 

It can result in more thoughtful Christmas gifts 

When you have a list of people you need to buy gifts for and months to do it you can take the time to come up with more thoughtful gifts. This is opposed to the regular last-minute shopping sprees where you are trying to think of something, anything that would make a decent present for your nephew or second cousin. 

It can make the holidays less stressful 

Wouldn’t it be nice to have some time to relax around the holidays? How would it feel to sit down with a warm coffee or a nice glass of wine on December 23rd instead of searching for last-minute Christmas gifts in a crowded store?

When you shop for Christmas all year round, you don’t need to be at the mall searching for a parking spot with everyone else. You can take some time to relax and really get into the holiday spirit. 

You can go into the new year on a financial high note

It’s all fun and games in December but January can be a real bummer if you overspend during the holidays. When you shop for Christmas gifts all year, you can start January on a high note and focus on achieving all of your New Year’s resolutions rather than waiting for your scary holiday credit card bill.  

Don’t forget to budget for each family member’s Christmas gift 

If you like the idea of shopping for Christmas gifts throughout the year, then it’s a good idea to still set a Christmas budget. Just as you can overspend during the last-minute Christmas rush, you can also overspend on Christmas when you’re shopping throughout the year if you don’t have a plan.  

Remember what Christmas is really about

This Christmas give yourself the gift of more time, less stress, and less debt by shopping for holiday gifts all year long! This strategy will give you the ability to focus on the things that really make the holidays special — the people, the traditions, and the memories! 

And that brings us to Christmas dinner! Discover how to create a budget for Christmas dinner too!

–By Jessica Martel 

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How Much Is Pet Insurance?

couple with cats and dogs

It’s not unusual for people to think of a pet as a member of their family. (There may even be days when a cat, dog, or bird is by far the household favorite.)

So of course those pet owners want to be sure they’re providing the best possible care for their animals without having to worry about what a trip to the veterinarian might cost.

Pet insurance offers a way to help pay for that care—whether it’s a routine checkup or an emergency. However, just like health insurance for the humans in the family, choosing the right pet insurance policy can be complicated.

There’s a wide range of coverage options and policy costs to consider. And pet insurance may not be the right fit for every pet owner.

What Is Pet Insurance?

Though it has a lot in common with human health insurance coverage, a pet policy actually falls under the property and casualty insurance classification.

It has been around for almost 100 years, but has only been available in the United States since 1982, when a subsidiary of Nationwide sold its first policy to cover the dog that played Lassie on TV.

protect pet owners from the high cost of taking their animal to the vet. (If a pet bites another animal or person, those costs typically are covered by homeowner’s insurance.)

There are a few types of pet insurance. Coverage can be limited to accident-only care for an animal, or it can be more comprehensive and include treatment for injuries and illness.

Some policies also include wellness costs, such as vaccinations, dental care, and medical tests. A few include extra benefits, such as coverage for pet care when an owner has an emergency, or coverage for vet care when the owner travels out of the country with the pet.

But preexisting conditions and cosmetic procedures usually aren’t covered. And policies tend to come with a waiting period of 10 to 30 days, which means if a pet is diagnosed with an illness or is injured before that time is up, treatment for that condition won’t be covered.

How Much Does Pet Insurance Cost?

The average cost of an accident and illness pet policy was $48.78 per month for a dog in 2019, or $585.40 per year, according to the North American Pet Health Insurance Association. For a cat, the average cost was $29.16 per month, or $349.92 per year. Adding wellness care and other benefits can increase the cost of a policy. So can the deductible, co-pay, and maximum coverage amounts the pet owner chooses.

The most common co-pay in the United States is 80%, which means the insured pet owner can be reimbursed for up to 80% of a qualifying claim.

The cost of coverage also may be affected by where the pet owner lives. In cities or regions where veterinary practices generally charge more for office visits or treatments, the cost of pet insurance may be higher.

And coverage may cost more based on a pet’s breed and age as well. Because some purebred cats and dogs may be more susceptible to certain medical conditions, they can be more expensive to insure.

Age is a factor. The older a pet is, the more it may cost to get coverage—both at the time of enrollment and as the pet ages. (It may be difficult to even find a company that will insure a much older pet.)

The good news is, there are no “out-of-network” provider charges to worry about with pet insurance. As long as the pet owner takes Fido or Fluffy to a licensed vet, and the expenses for the visit qualify, it’s just a matter of filing a claim. Some insurance companies may pay the vet directly, but most reimburse the pet owner after the claim is submitted and verified.

How Can Pet Owners Find Prices and Plans?

Because every pet and every plan is a little bit different, it can pay to do some research.

An increasing number of employers now offer pet insurance in their benefits packages, which could mean a lower premium. So pet owners may want to check with their human resources department to see what their company has to offer.

It’s also easy to get an online price quote from many of the companies that offer pet insurance. A quick search will turn up several well-known insurers (Nationwide, Progressive, Geico, Allstate) that offer coverage, along with insurance companies that are strictly for pets. The insurer will ask a few questions (the pet’s name, age, gender, breed, any preexisting conditions), and then provide quotes for three or more plans, along with some details about the benefits those plans include.

It also may help to have an idea of what it costs to treat common (and not-so-common) problems a certain type of pet might encounter.

For example, the analysts at ValuePenguin found that the average cost of a vet visit for a dog with a common condition like a skin infection is $176, and for an ear infection, $149. Those bills might be daunting but not necessarily devastating for a family’s monthly budget. But canine chemotherapy could cost more than $1,000 a month, according to PetCareRX.com . And the bill for an entire course of treatment could be as much as $10,000.

The same thing goes for cats. An occasional visit to the vet for a urinary tract condition ($295) or an upper respiratory infection ($219) might be manageable. But the cost for a course of cat chemotherapy could be a budget-busting $10,000.

Planning for those costs could help pet owners decide if insurance is something they should consider. (Your vet also may be able to provide some helpful information that pertains to your specific pet.)

Too busy to do a deep dive into pet care costs and insurance options? There are plenty of online reviews and “best of” lists from folks who already have done the work. (As with any review or list, pet owners may find up-to-date information from an unbiased source to be the most useful.)

So, Is It Worth It?

As with so many financial decisions, there are pros and cons to purchasing a pet health policy.

Insurance may take some of the stress out of making treatment decisions for a beloved pet based on the ability to pay. Although there still could be out-of-pocket expenses to consider, it might help avoid what the pet insurance association calls “economic euthanasia,” when a pet owner makes the heartbreaking choice to put down a sick or injured animal because the required care is just too expensive.

Insurance also might help a pet owner sidestep the temptation to use a high-interest credit card to pay for care.

Another plus: Because policies can be customized, it may be possible to find one that provides basic coverage and still works within the family budget. And pet owners who love their vet won’t have to switch to a new provider.

cash management account can help you manage your overall budget and determine if you can afford pet health insurance, or if you’d have to make some adjustments to make it work.

Do you know how much you’re spending on veterinary bills—either for wellness visits or illnesses? You can use the SoFi app to help track the spending history in your SoFi Money® account and see what you’re actually paying the vet each month or year.

Do you have an emergency fund that you could turn to if your pet is injured in an accident or suddenly becomes seriously ill? If you decide you’d rather put your money into an emergency fund instead of pet insurance, the interest you’ll earn on the cash in your SoFi Money® account could help you grow that fund faster than if you kept it in a traditional checking or savings account.

People love their pets, but the cost of owning a pet can be overwhelming. Putting together a plan for how you’ll pay for your pet’s care—from puppy- and kittenhood to old age—could help keep those bills from chewing up your hard-earned paychecks.

Learn more about how SoFi Money® can help track expenses and save for emergencies.



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