Budgeting for Life’s Events:
A Simple Plan for Holidays, Travel, and Big Expenses

(Inside: Find simple budgeting strategies to prepare for holidays, travel, and life’s other big expenses.)

Have you ever thought, Wow, {insert life event here} really snuck up on me!, and you are left to scramble for a last-minute gift? Or, maybe you woke up one sunny day and realized summer vacation was just around the corner and your family is going to want to head out of town, hit the amusement park, or participate in a pricey sleepaway camp? 

Although these events are meant to be exciting, all too often the question of “how are we going to pay for this?” can overshadow the joy.

Cue the panic.

Cue the reach for the credit card.

Cue the budget crash.

Whether it’s a birthday, anniversary, holiday, or another special occasion, life’s moments have a way of creeping into our budgets and causing chaos if we haven’t prepared for them. Then, when the numbers don’t add up, it is tempting to lean on credit cards to fund these special moments which can increase levels of debt. 

That’s quite the opposite of “fun family time,” isn’t it? The good news is that with a little forward thinking and budget planning, you can enjoy these exciting moments without the added financial strain and anxiety.

How Life’s Events Impact Your Budget

The reason that life events, such as travel, holidays, and seasonal commitments, are so tough on our budgets is because they are irregular. Much like your annual Amazon Prime membership, it’s out of sight, out of mind… until it’s not. Even the best budgets can be derailed by these pop-up items, and that is okay! The monthly budget should allow for flexibility throughout the year to plan for bills (like that annual Prime membership) or other celebrations (like Christmas) as they come up. We’ve got a whole post on budgeting for irregular bills, so for today, let’s focus specifically on necessary budgeting occasions. 

Planning ahead

Take out your calendar and flip (or scroll) through the last year. Take note of each month’s events that had or might have a financial impact. 

These could be:

• Birthdays
• Holidays
• Family get-togethers
• Travel 
• Seasonal (think back-to-school time or summer break)

Once you have your list, put a star next to the events that are most likely to recur in the year ahead. Now, flip your calendar to the current year and add any upcoming events that weren’t on last year’s calendar that you need to plan for — like your sister’s wedding or that family cruise. 

With your list ready, let’s incorporate them into your monthly budget!

The Key Strategy for Budgeting Life’s Events

Now, we are going to employ a stealthy budget strategy called sinking funds! Sinking funds are a way to plan monthly for any expense that does not recur monthly. 

To use this strategy, take your events list and start assigning a realistic budget amount to each event. How much do you plan to spend on your anniversary present? How much is the camp registration fee? What do you expect to spend on school supplies? 

> Tip: If you are not sure how much these items cost, look back at your bank statements to gain insight into your spending.

Add up all of these amounts, and then divide by 12. This is the dollar amount you need to put into your monthly budget over the course of a year. Next, (and this is the most important step!) treat this dollar amount like a bill you have to pay and move this amount out of your checking account and into a designated savings account. I like to use Ally Bank because they feature spending “buckets” for designating money. 

For more details on this strategy, head on over to our Sinking Funds 101 post. 

What To Do When Money is Tight

The sinking fund strategy sounds great, but what if you don’t have that extra amount just lying around each month to create an extra “bill” in your budget? Great question! That means it is time to get a little bit more creative and evaluate a few factors. 

Modifications to consider

Ask yourself these questions:

• Revisit the amount allocated to each event. Is it too high? Can you brainstorm ways to make this occasion less expensive? 
• Can you temporarily cut any discretionary expenses within your budget, like a subscription, to reassign that cost toward this savings fund?
• Is this an instance where you can split expenses with a family member or another person? If you are throwing a 70th birthday party for Mom, can you split party costs with your brother? 
• Are there expectations you need to adjust? Are you able to buy a gift for each one of your ten nieces and nephews, or should you re-examine your gifting preferences?

Take the challenge

To up the ante, can you challenge yourself to save more toward a specific occasion with a quick savings challenge or no-spend challenge? Savings challenges are easy to implement multiple times throughout the year, and no-spend challenges can be a great exercise in spending discipline that yields more than temporary increased savings.

How to budget for holiday, travel, and seasonal expenses

Twelve months in the year leaves room for many budget-worthy moments and memories! The key is to break down each event into smaller pieces so your budget isn’t caught off guard. As you utilize the sinking funds strategy in the background of your monthly budget, tackle common expenses with these additional budget tools. 

Holidays

A joyful but expensive time of the year. To stay ahead of the costs, make a point to:

• Plan ahead. Use our Holiday Budget Planner to list out gifts and related expenses well ahead of December.
• Set spending limits. Decide how much to spend per person, and shop throughout the year to save on gifts. For additional help and easier gifting, grab our Valentines & Christmas Gift guides!
• Don’t forget annual giving. If you intend to make a year-end charitable contribution, be sure to incorporate that into your holiday budget. 

Seasonal and Family Expenses

Birthdays, fall fun, sports registrations, and back-to-school seasons seem like small budget additions, but they can quickly add up when multiple fall within the same month. Keep an eye out by:

• Conquering back-to-school. Save big on school supplies and ace your back-to-school budget with our Back-To-School budget guide and budget template. 
• Brainstorming activities. List out as many potential activities and their associated costs to keep budget surprises to a minimum. Once you’ve brainstormed, make a note to add this expense into the relevant month’s budget.
• Celebrating intentionally. Will you be able to attend every birthday party and give every gift? Adjust your priorities as finances and schedules change throughout the year to avoid stretching your budget.

Vacations

Super fun but can be super expensive if you are not prepared! The best way to prepare for this event is plan, plan, plan! 

• • Estimate travel costs. Use our Vacation Travel Planner & Budget to map out transportation, lodging, meals, and activities ahead of time. This allows you to have fun on your trip without worrying you’ve overspent.

• Research ways to save. Bundling air and hotel, driving versus flying, and scoring discount tickets can all shave a little off the total trip cost.

• Heading to Disney? Disney vacations are multi-faceted and require their own level of planning! Our Disney Vacation Guide has money-saving tips from a Disney travel agent, plus a Disney-specific budget template.

When to get extra support

Sometimes, life events seem to really stack up! In 2024, my parents changed jobs, moved cities, endured an illness and hospital stay, and welcomed two new grandbabies. They were financially stressed simply because of everything that was happening at once! If you find yourself in a similar situation,  you might find it helpful to get personalized financial guidance. We’d love to be your guide as you navigate any major life transition. Check out our financial counseling services to see how we can help you prepare financially for these life events with confidence.