Consumer Blog

Seems we’ve just swept up the last of the pine needles from the holidays, and Valentine’s Day is just about here. And on that theme, we’ve heard it said that love is grand. But to some people, that phrase means that when it comes to gifts for their honeys, love should cost them a grand. Or maybe even more! But look, we’re not here to give advice on how to spend properly to make your loved ones go all melty, we’re here to give advice on how to budget for it. And sure, they say love hurts, but budgeting for Valentine’s Day (or any other gift-giving occasion) doesn’t have to.

We’ve broken this down into a four-step process that should make budgeting for the perfect valentine gift a lot easier than choosing what to get—not to mention infinitely easier than finding the right person to get it for. Finding love isn’t our area of expertise, but budgeting is, so, let’s take a look.

Step 1: Add up your income

Bust out the calculator and add it all up. All of it. Take-home pay, investment interest, trust payouts, etc. Basically, any money that comes in on a regular basis. It’s a good number to know, and now you’ll know it.

Step 2: Add up your expenses

While this one may not be as fun as adding up your income, it’s another good number to know. Start easy with the regularly occurring monthly expenses like mortgage payments, utilities, mobile phones, car payments, loans, credit cards, as well as any fixed monthly or annual payments like car or rental insurance or homeowners’ association fees.

The harder part is figuring out the less regular expenses like groceries, dining out, entertainment, gas, auto repair, and other miscellaneous things. If you use a payment app, they could be very handy here. Lacking that, going back to your monthly account statements and averaging out these expenses over several months will give you a fairly accurate monthly number. Once you have all these numbers, add them to the fixed expense number, and move on to the next step.

Step 3: Compare your income to your expenses

Of course, we all want our income to outpace our expenses, and if yours do, then congratulations. That makes gift-buying (among a lot of other things) a whole lot easier. If, on the other hand, your expenses outweigh your income, it’s time to take a cold hard look at where the money is going and how to alter that balance. Find the areas where you can reduce your spending and figure out. Keep in mind, though, that it might not be only the big expenses that can be reduced. Sometimes just trimming a little off of some of the smaller expenses can add up to a surprisingly tidy sum over time.

Step 4: Start putting something aside

Now that you’ve figured out all those handy numbers, you should have a pretty good picture of your overall finances. If you’ve found you have money to spare, put some aside for that perfect gift and give yourself a pat on the back. But if, like many of us, you’re pretty much tapped out, maybe a nice card is a better idea. Just pick a good one.

There are other options, like in-store credit programs that often have better terms and interest rates than credit cards, including some that offer zero interest (usually for a limited time). But be careful about getting yourself into any extended debt, and if you do, be sure to read the fine print. Remember, love may make the world go around, but a positive cash flow is a lovable quality all its own.