10 Hidden Holiday Costs People Overlook in Their Budget

December 16, 2008

I ran across an article on CNBC about the top 10 hidden costs associated with the holidays, and it struck a chord with me, because I often overlook these expenses during the holiday season. Here is the list from the article and my take on each of them.

1. Holiday meals/gifts for hosts/entertaining

My wife and I just bought a house, and we wanted to utilize the holidays as a way to show off our new pad. So, we planned a Christmas party, then agreed to have the family over for dinner on Christmas day, and then we invited friends to hang out at our place for New Year’s Eve. We sat down and planned out each of the events the other night, and the expenses associated with entertaining were something we did NOT plan for two months ago.

2. Holiday cards/wrapping paper

This is never a huge expense for us, because we buy wrapping paper from the dollar store, and we spend very little on holiday cards. For holiday cards, snap a photo of you and your family with your digital camera. Then, upload the photo onto the website of your choice that develops digital image files. Then, choose a Christmas background border, and you are done. We spent about 60 cents to a $1.00 per holiday card last year.

3. Holiday travel (airfare, hotel, gas)

Holiday travel is the worst. We try to avoid it if at all possible. The most we might travel on Christmas is a two hour drive to my hometown. I don’t consider this one a “hidden” expense, because most people plan for these expenses well in advance.

4. Holiday decorations

Ugh, this was another one that trapped us. We have a house now, and of course we want to decorate it like it’s Santa’s workshop. But, we resisted the temptation to go overboard, and we will be waiting until after Christmas to get all of our decorations at 50 to 75% off. We’re okay for waiting until NEXT year to make our house look like the North Pole.

5. Shipping/postage

This one catches many people off guard. When you are sitting down and coming up with a gift budget for each person on your list, make sure you include the cost to ship the gift. So, if you budget is $50, don’t buy a $50 gift and spend $15 to ship it. Multiply that by 10 more people on your list and you will be wondering where all of your money went.

6. Clothing/holiday party outfit

If you buy a new outfit specifically for a holiday party you’re cutting into your gift giving budget.

7. Electricity for holiday lights

Most Christmas decorating veterans factor in their budget that their electric bill will be astronomical in January. The new LED lights provide some electricity savings, but the main thing is to not go overboard with your lights. Does your house really need to be seen from outer space? Be tasteful and purposeful with your light decorations. Your house will look better and you won’t annoy your neighbors so much.

8. Additional childcare/pet sitting

This is a big expense during the holidays that many people overlook. Factor in a couple hundreds dollars extra for childcare and pet boarding if you have children and dogs and/or cats.

9. Charitable contributions

Make sure you factor in your charitable giving into your budget. This would be anything above and beyond you already give throughout the year.

10. *BONUS* Gift for yourself – but only if you can afford it!

Gift for yourself? Please! You might be able to convince your spouse into buying a “family” gift, but it’s tough to justify a gift for yourself during the season of giving! Can you think of any other hidden expenses that you might incur throughout the holidays? Share your thoughts with us in the comments section. The holidays are all about planning, and if you don’t plan, you’ll start whipping out the plastic. Don’t let yourself have a credit card hangover in January. it’s not too late to plan for your upcoming expenses in the next two weeks.


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Erik Folgate is a husband and father living in Orlando who's been writing about money online for 6 years. Digging himself out of $20k of debt after college and his former experience in the insurance industry give him some useful insights into personal finance issues.

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