hey everybody welcome back to whiteboard finance in today's video i'm going to teach you how to budget for the holidays and how to make smart spending decisions so that you're maximizing rewards and getting closer to your financial goals even while spending so thanks to sofi for sponsoring this video but more on that later budgeting for the holidays is incredibly important because a lot of us end up spending way more money on way more people and things than we originally planned for if you know me you know that i'm not a huge fan of micro budgeting
every aspect of your life but budgeting definitely makes sense when it comes to a specific time period or specific event such as the holidays i'm the big softy that wants to buy everything for everyone because it makes them feel happy and it makes me feel happy for being able to provide but at the end of the holiday season my bank account may not be feeling so happy so in this video i will show you five steps on how to budget for the holidays so you don't break the bank and keep your loved ones happy if
you want to supplement this video with my holiday budgeting spreadsheet you can find that in the link in the description below stay tuned okay so step number one is common sense it is setting a spending limit so setting a spending limit for the holidays is incredibly important the mistake that a lot of people make is that they think of all the people they want to buy gifts for and then they assign an item in their head for that person so for example jimmy's going to get a sweater or mike's going to get a video game
the problem with this is that these prices may actually fluctuate and not only that these people and items are just arbitrarily floating around in your head as opposed to being accounted for being by being written down or in a spreadsheet so again if you want to get my holiday budgeting spreadsheet it's absolutely free check out the link in the description below so what i recommend doing is first figuring out what your entire budget is for the entire holiday season from essentially thanksgiving to new year's the money that you can reasonably spend during this time is
money that's either been earmarked throughout the year for this holiday season or it's the amount of money that's going to surplus aka not going to bills and other mandatory monthly expenses what you don't want to do is go into massive debt to fund these purchases which are usually in the form of gifts holiday travel food and entertainment so marco how do you figure out this amount so let's pretend you have an extra 100 a month sitting around going into a high yield savings account or a stock account say you have a hundred dollars times 12
months in the year this will allow you to spend twelve hundred dollars this holiday season if that's where you want to dedicate that extra hundred dollars a month one hundred percent specifically for the holidays obviously you can divide that how you want but according to the national retail federation the amount of money americans planned to spend on gifts and food and decorations in 2020 was only 998 dollars so comment down below and let me know if you are anywhere near this 998 or what you typically end up spending during the holiday season if you have
no idea then step one is a must for you to follow step number two is to list all of your expenses and recipients so what gets measured gets managed if you come into the holidays with a game plan then it's a lot easier for you to understand what your budget is which we figured out in step one and we're gonna figure out where that money is going right now in step two what a lot of people don't consider when budgeting for the holidays is the number of expenses that actually go into participating in the holidays
so what do i mean by the word participating well if you have family out of town or you need to travel travel is going to be an expense just because money isn't specifically going to people and gifts which we will describe as recipients in this step you are still incurring monetary expenses uh side note since this video is sponsored by sofi and the credit card this one right here which i'll talk about later if you're traveling out of the country sofi's card has no foreign transaction fees so when creating this budget i have expenses and
recipients separated into this budgeting spreadsheet so when thinking more about participating in the holidays you need to list everything and we're going to start with expenses first this could be anything from wrapping paper all the way up to a plane ticket to get you to your destination if you are indeed traveling please make sure to account for expenses first the next step is listing out all of the recipients that you wish to put on your gift list so list all the people these are the people that you actually want to give gifts to i want
you to think about this long and hard because it is so easy to fall into the trap of just starting to buy random gifts for random people that you never really expected to buy gifts for in the first place there's absolutely nothing wrong with this and i believe you should be an incredibly giving person because at the end of the day it all comes back around via karma but this is where people's budgets typically get blown up so once you come up with an expenses number and a recipient's number or recipient's list i want you
to take a look at if this is within your budget which we created in step one and if these numbers work then you can move on to step three step number three is to allocate these funds okay so here's the fun part and this is the part that shows you exactly how much you value someone's relationship by assigning a specific a dollar amount to their name you may love some people more and love some people less but the only true indicator is how much we decide to spend on them now we're in the true holiday
spirit of rampant american consumerism i love it uh all joking aside this is actually one of the most important steps in being able to stay within your budget so if you go back to the holiday budgeting spreadsheet there's going to be a recipient's column with a budget amount and the actual amount spent on this person resulting in the third column which is the difference between the two so for example if we budgeted a hundred dollars for ashley and ended up spending 90 on her this gives us a difference of positive 10 or 10 dollars below
our budget the point of this step is to go through all of your expenses and recipients that we talked about in step two and budget for them up to your total budget amount from step one once you've given this some thought and finish this step it's time to go on to step four and to actually go shopping and track everything step number four is to track everything now there are two different ways that we can track all these expenses the first one would be with my spreadsheet and the way you can do this is just
to put it in google drive and you can access it on your cell phone while you're actually at the store making these purchases the other way is to use a credit card which i personally do with the sofi credit card for multiple reasons one of the reasons i specifically use the sofi credit card is that everything is tracked and easily displayed within their app in one convenient place this shows me exactly how much money i've spent on all of the items on my holiday expenses and recipients which we talked about in the first three steps
the nice thing about the sofi credit card is that it has a zero dollar annual fee and two percent unlimited cash back if things are budgeted for responsibly if i already know how much money i'm going to spend from step one i'm definitely going to take advantage of getting some cash back for buying things i would have bought responsibly anyway this cashback can be automatically redeemed to save invest or pay down debt using that sofi app so that means you can use it towards a sofi personal loan or a sofi student loan refinance balance so
at this point i'm buying things that i'm going to buy anyway and paying down debt with the rewards at the same time since my wife and i don't have any debt i specifically use this credit card in order to earn rewards that go towards buying crypto through the sofi app so every time that i spend money using this credit card i get two percent unlimited cash back which i then use to buy bitcoin and other cryptocurrencies the beauty of this is that if bitcoin does what i think it's going to do aka go up then
i'm actually potentially earning more than two percent back on these purchases uh so maybe bitcoin will actually pay for my holiday shopping this year if you're interested in the sofi credit card apply and get approved to win a piece of 1 million dollars in rewards points sofi also has a tool called relay that lets you see your full financial picture from spending to investments so you can track literally everything at once so when you redeem credit card points for crypto you can track your crypto right alongside your credit card balance having everything in one place
is a great way to stay consistent with your tracking and tracking everything is especially important during the holiday season when temptation is everywhere so now that we've created a budget listed all of our expenses and recipients allocated funds to each one of these expenses and recipients and finally bought and tracked everything we should be well within our budget this holiday season remember that this is simply a way to measure and manage a realistic benchmark in the form of a holiday budget the same thing could be applied for vacations traveling or big events that you have
to look forward to even if you did go a little bit over budget it is not the end of the world having a budget for events like this is much better than blindly going into a holiday season hoping and praying that you're able to pay off all the debt that you may incur if you haven't saved up for the holidays ahead of the time so check out the sofi credit card and apply with my link down below if you get approved let me know how many holiday rewards points you end up winning i want to
hear about it thank you so much everybody and have a prosperous day according to some people using the plastic rectangle may lead you one step closer to i can't i'm not gonna even do it if you know how much you're spending and you're gonna spend it anyway get the rewards you
