Budgeting Basics | How To Tips for Passover Budgeting

Tonight starts Purim. And you know what that means…

Just one more month ’til Pesach.

Deep breaths. We can still enjoy our Purim chagigot!

But come Sunday, it’s time to get serious about the business of budgeting for Pesach – okay?

I know the timing of this post might seem odd, but I’ve gotten so many emails this week alone about Passover that I wanted to get a jump on this subject.

From those that have written to me, it seems many of you are wondering about:

How much should I budget for Pesach?

How can I save money for Passover?

What if we don’t have any extra money in our budget to cover Passover?

Do I need a special savings account for Peasch?

And much more…

As for how much to budget for Passover, I think the key is to choose an amount that is a refection of both your need and your availability of funds.

If you are having two sederim at your house and plan to have 25 people at each one, and will have 12 guests staying at your house for all of chol ha’moed, then you might feel that you “need” $1500. Or whatever the magic number is.

There is no right or wrong number. As long as you have the money in the bank to cover it. And it won’t require onerous sacrifices the rest of the year.

For example, if you make $30,000 a year after taxes, then spending $1,000 on Pesach may be “do-able” – but it may require too deep of sacrifices in other ares of your life. Budgeting is a balancing act, so be sure to think about the ramifications of your spending.

Of course, done “right” that $1,000 could probably be reduced to $600 or less without any perceptible cut in quality. You may want to refer back to some of the Passover money-saving posts that I ran last year – including:

Don’t worry – I will be revisiting a lot of these ideas and sharing new ones as well over the next couple of weeks.

As for how to save, I would suggest that this year – since we are just one month out – you take a look at your March and April budgets and see if you can afford to cash flow your Passover spending. Can you save a little bit from your food budget in March – and pad it a little bit more next month – to make it work?

I’ve had readers tell me that they skim off part of their tax return for Pesach every year. This will obviously only work if you file earl. Even still, banking on doing siois somewhat risky, as you obviously aren’t guaranteed a refund.

(Plus, if you’re intentionally claiming your deductibles to guarantee that you get money back, you’d be better off financially to adjust them, get the money in your pocket every month, and set it aside yourself.)

If you find this year that cash flowing your Pesach budget was too tight, you may want to consider dividing the total amount of your costs by 12 and then saving 1/12th of that amount every month to a sink fund.

For those that go this route, consider adding your fall yom tov costs into this figure as well. If you’re not sure how much to set aside, start with $50 – $100 per month to cover both.

Remember – whatever you save money into your yom tov sink fund is for spending on top of your regular food budget. So, I think for most of us, saving $1,200 per year should be more than enough to cover Pesach, Rosh Hashana and Sukkot. If you find that it’s not enough, though, go ahead and make an adjustment mid-course. And if you have money left over, redistribute the funds after next Pesach (or proportionately decrease your monthly savings for 2013.)

Finally, as always, I recommend having a good tracking method in place. Setting a budget is one thing; sticking to it is something else entirely!

It’s all too easy to run out and grab “just two more things” – but if you have already spent your Pesach budget, you are getting into dangerous territory with the rest of your monthly budget. That’s why an envelope – virtual or real – can be so helpful.

Stay tuned next week as we start talking about strategies to reduce your overall spending for Passover.

How do you budget for Passover? Do you use an envelope to reign in your spending? Have you noticed any trends in your Passover spending from year-to-year?