How To Budget For December In 4 Simple Steps
December is not a chill month for your wallet.
You have Christmas, travel, teacher gifts, parties, December babies, secret Santas, sports parties, and that random white elephant gift your kid told you about the night before. No wonder your brain wants to check out and swipe the card.
If you have ever thought, “I make good money. Why does December still knock me flat?”, this is for you. Learning how to budget for December is way less complicated than you think, especially when your budget actually matches your real life, not a cute 50 / 30 / 20 formula.
In this post, you will learn a simple way to build your December budget so you can cover the chaos, enjoy the fun, and stop wondering where all your money went.
Step 1: Close Out November First
Before you touch December, clean up November.
Do a quick review:
- Update your income
- Add in every paycheck, bonus, side hustle, garage sale and random Venmo that hit in November.
- Check your bills and minimum debts
- Make sure every bill and minimum debt payment cleared your Bills account.
- Put the real minimums in your budget, not the random amount you wish you were paying.
- Fix anything that did not match the plan
- If you spent in a category you did not plan, update the budget so November reflects reality.
You are not doing a forensic audit here. You are simply making sure November is accurate so December starts on a clean slate instead of a mystery.
Step 2: Start Your December Budget With Income
Now open up your fresh December tab.
List all the income that will fund December:
- Every paycheck
- Side hustle income
- Bonuses or commission checks
- Any extra money coming in
If you are a paycheck ahead, your last paycheck in November might be the first one that funds December, just like Brittany and James in our example. Their November 28 paycheck covers early December bills so they are not scrambling for those first 11 days of the month.
Seeing your full monthly income on one page is powerful. Most people have never looked at the whole month that way.
Step 3: Give Every Dollar A Job In Four Buckets
Once income is in, you are going to tell it where to go in this order:
- Debt minimums
- Bills
- Spending (your 5 everyday categories)
- Savings buckets
1. List your debt minimums
Debt is any money you owe anyone for any reason. On your budget, list:
- Each credit card
- Vehicle loans
- Student loans
- Medical debt
- HELOC or personal loans
Add the true minimum and due date next to each one.
Brittany and James discovered they were paying $1,774 in debt minimums every month. That number is annoying, but also motivating. It lets them ask, “What could we do with an extra $1,774 every month once this debt is gone?”
Sometimes the best move is not classic “smallest balance first.” If paying off one bigger payment frees up $700 a month, that might be the smarter first target. Your method should fit your numbers, not the other way around.
2. Add your bills
Bills are anything with a due date:
- Mortgage or rent
- Utilities
- Phone and internet
- Insurance
- Subscriptions and memberships
Brittany and James spend about $3,149 on bills, including things like gym membership and a few streaming services. It is not tiny, but it is reasonable for their income. Most important, they can afford it and see it clearly instead of guessing.
3. Set up your 5 spending categories
This is where your regular life happens. Instead of 47 categories and an app yelling at you, you keep it simple with five:
- Gas
- Groceries
- Family fun or dining out
- Personal money
- Kids
We recommend five separate checking accounts for these. On payday, you automatically fund each account, then use the matching debit card for that category until the next payday.
No need to “track every expense”. Just built in guardrails because when the account is empty, you are done.
[Related: Get our Simplified Budget System]
4. Add month specific December stuff
Next, look at what is unique to this December:
- Travel for a college trip
- Kids’ Christmas parties
- Teacher gifts
- Extra giving
- Birthday parties for December babies
Put those line items at the bottom of your spending section. They are one time for this month, but they still need a plan.
For our couple, that looked like:
- $500 for a college trip
- Birthday money
- A little extra for Christmas parties
Nothing wild, just honest.
5. Build your savings buckets
Now the fun part. Savings buckets are where you:
- Avoid surprise bills
- Stop raiding your emergency fund
- Finally save for things you actually want
Good bucket ideas:
- Annual bills
- Kids activities and travel
- Christmas and gifts
- Glam and clothes
- Vehicle maintenance
- Home projects
- Pets
- Medical
Brittany and James are putting about $2,800 every month into savings buckets. Their annual bills bucket alone gets $680 so that big once a year bill is fully ready instead of panic inducing.
Every paycheck, money flows automatically into those accounts. They get to watch the balances grow while they live their life.
Step 4: Decide What To Do With The Extra
Once you:
- List income
- Subtract debt minimums
- Subtract bills
- Subtract spending
- Subtract savings buckets
Whatever is left gets one more job.
In our example, Brittany and James had $543 left. They chose to send it as extra to debt. That brought their budget to zero on paper.
Zero does not mean you are broke. It means you gave every dollar an assignment before the month began.
Your Next Money Move
December will always be full, but it does not have to wreck your bank account. When you:
- Clean up last month
- Start with real income
- Give every dollar a clear job
- Use five simple spending accounts
- Build savings buckets for the “unexpected but expected” stuff
You can enjoy the month, say yes on purpose, and stop waking up in January with a money hangover.
If you want help setting this up without wrestling spreadsheets, our budget template already does the math and the flow for you so you can plug in your numbers and go.
Ready to set up a December budget that fits your real life?
Click here to grab the Simplified Budget System and we will walk you through the exact steps to build this kind of plan for your own family.
FAQs: How To Budget For December
1. How do I budget for December without going broke?
To budget for December without going broke, list all of your December income in your budget spreadsheet, then assign it in order to minimum debt payments, bills with due dates, your five spending categories (gas, groceries, family fun, personal, kids), and finally to savings buckets and holiday extras so your total December budget equals your income before the month even starts.
2. How much should I budget for Christmas in December?
To decide how much to budget for Christmas, first add up everything you plan to spend including gifts for everyone, parties, teacher gifts, travel, gas, cards, wrapping, shipping and stocking stuffers, then subtract any money you have already set aside in savings buckets, gift cards or cash and plug the remaining amount into your December budget, adjusting flexible categories like dining out or fun money until your total December budget zeroes out.
3. How do I budget for December on a low income?
If you have a low income in December, start by covering non negotiables like housing, utilities, basic groceries, gas and minimum debt payments, then choose a smaller but honest Christmas amount that fits in your budget and. If you are really squeezed, call your car lender or bank to see if they offer a one month “skip a payment” option for December.
4. How do I stop overspending on Christmas gifts?
To stop overspending on Christmas gifts, decide your total gift budget before you shop. Break it down by person or event in your planner and use just one account or card for Christmas so you always know how much is left by checking that single balance instead of guessing in the moment.
5. What savings buckets should I have for December?
For December, helpful savings buckets include Christmas and gifts, travel, kids’ activities and sports, annual bills, vehicle maintenance, home expenses, pets and medical so you are slowly prepaying these “unexpected but actually expected” costs with every paycheck instead of relying on credit cards when they hit.
6. How can I budget for December without tracking every dollar?
You can budget for December without tracking every dollar by setting realistic amounts for your five spending accounts in your spreadsheet, auto transferring those amounts into separate checking accounts on payday and then simply spending from the correct account while letting the balances and your Simplified Budget System spreadsheet do the work instead of you logging every single transaction.