With the holiday season well upon us, many people are already planning for New Year's parties and celebrations. If you're considering hosting a party yourself, there are a number of budget tips that you can use to keep your party realistic. Though New Year's might be an exciting event in the holiday season, no special event is worth going into debt. Plan your party right and make sure that you're putting your money to the very best use. (For more, check out Host A Holiday Party For Less.)

TUTORIAL: Budgeting Basics

Set Money Aside
Though the holiday season might be the time of year when many people tend to overspend, if you're planning on hosting a New Year's party, you really should budget for this in advance and set the money aside. There are a variety of guides and worksheets available online that can help you to estimate the costs of a party, and to figure out how much you should plan to spend on food and beverages. The further in advance you start planning your party or get-together, the better. Start setting a bit of money aside from each paycheck so that you'll have the cash you need to put together the party of your dreams – especially if you have a specific theme or style of entertaining in mind.

Be Realistic
It's a lot easier to host a smaller get-together of 10 close friends than it is to host a huge gathering of 100. Keeping costs down relies on having realistic expectations. The more people you invite, the more space you'll need and the more you'll have to spend on food and drinks. If you want to avoid having to rent a hall to accommodate your huge guest list, keep the invites down to the number of people that you can comfortably fit into your home. This will naturally help to keep your other costs down too.

Set Limits and Stick to Them
Creating a solid budget is a big part of establishing your limits when planning a party. Once you know how many people you can realistically invite, create a list of the items you'll need to purchase and itemize each expense. You're likely to have expenses for a variety of different types of items – from decorations, to food, drinks and perhaps entertainment. Know how much you plan to spend on each type of expense. Don't forget that you may have some unforeseen expenses as well, so you should probably add about 10% to your budget to cover any unforeseen or last-minute expenses. If you notice your spending is getting out of control or that you're not sticking to your budget, it's time to step back and reevaluate. (To further assist your plans, read 8 Tips To Help You Control Holiday Spending.)

Keep the Menu Simple
It costs more to host a classy sit-down meal than it does to put together a cocktail party or a casual get-together. Selecting a simple menu of snacks and appetizers will help to keep your costs down, and making a number of your menu items yourself is less expensive than buying convenience foods or paying a caterer. You can also choose to stock your bar with a simple selection of beverages like wine, beer and non-alcoholic beverages, or perhaps you could offer a couple of feature drinks and allow your guests to bring anything specific that they may like to drink. If you're hosting a casual get-together for your closest friends or family members, you could also opt for a potluck event where everyone brings something to contribute to the menu.

Use What You Have on Hand
You've already got strings of LED lights from Christmas. Why not hang them up around your home rather than shell out the cash for streamers and balloons? You can create a party ambience with many items that you've already got at home. Turn the lights down low, light candles and play some music to set the mood. You don't need to spend a load of cash on decorations to create a party atmosphere – and it's not very budget savvy to spend your hard-earned money on decorations that you'll only use one night of the year.

Plan in Advance
It's a fact that the further in advance you start planning, the more money you'll be able to set aside and the more prepared you'll be when the big night arrives. If you tend to host a New Year's party every year, you could consider purchasing some clearance decorations after New Year's and store them for next year's party. These decorations tend to be a lot less expensive if you purchase them when they're on sale, and then you can splurge on some of the more elaborate decorations that might otherwise be out of your price range. You can also watch for sales on items you know you'll need throughout the fall season.

The Bottom Line
Throwing a great party shouldn't leave you in debt. And a really memorable party probably has little to do with how much you spent on it. A party is about having your closest friends and family come together to celebrate, not about going broke trying to put together the most elaborate event possible. Though it may be tempting to stray from your budget, keep in mind that you created the budget for a reason. With a little advance planning and sticking to the limits you've set, your party should go off perfectly, and you'll be able to ring in the New Year knowing that you've made a solid financial decision. (To learn more, check out How To Reduce Holiday Debt.)

Related Articles
  1. Home & Auto

    4 Areas to Consider Roofing Material Types

    Roofing your home is very important, that’s why you should choose a roof specifically designed to handle your area’s climate.
  2. Budgeting

    The 5 Most Expensive States for Child Care

    To get a better sense of how child care costs can fluctuate, here's a look at the costs of child care across the country.
  3. Home & Auto

    Looking To Invest In Home Improvements?

    Some home improvement projects could cost you more to complete than they’ll pay out in equity. So, here we show you the worst projects to avoid.
  4. Fundamental Analysis

    Understanding the Internal Rate of Return Rule

    The internal rate of return rule is a popular method used to compare investments or projects.
  5. Home & Auto

    Are Home Inspections Worth It? - Price vs. Value

    If you’re wondering whether home inspection is worth the investment, the following information will help you decide.
  6. Budgeting

    How to Defray Long-Term Care Expenses

    Here's a handful of options on what you can do to defray long-term care expenses.
  7. Budgeting

    The True Cost of Home Caregiving

    Caring for eldery family in-home might be unavoidable, but most caregivers don't realize the true cost of doing so.
  8. Budgeting

    Is Level Money the Perfect Budgeting Tool?

    Here’s a detailed review of how Level Money works and whether it could be the perfect tool to help you budget.
  9. Economics

    Explaining Budget Surplus

    Budget surplus is an economic term describing a situation where revenue exceeds expenditures.
  10. Savings

    Millennials' Money Habits: How to Help

    Millennials gleaned much of their financial savings habits from their parents. Here's where they could use some help.
  1. Internal Rate Of Return - IRR

    A metric used in capital budgeting measuring the profitability ...
  2. Construction Loan

    A short-term loan used to finance the building of a home or another ...
  3. Debt Consolidation

    The act of combining several loans or liabilities into one loan. ...
  4. Personal Spending Plan

    Similar to a budget, a personal spending plan helps outline where ...
  5. Fudget

    A falsified statement of income and expenses. A fudget or "fudget ...
  6. Capital Project

    A long-term investment made in order to build upon, add or improve ...
  1. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  2. What is the range of deductibles offered with various health insurance plans?

    A wide range of possible deductibles are available with health insurance plans, starting as low as a few hundred dollars ... Read Full Answer >>
  3. How do I know how much of my income should be discretionary?

    While there is no hard rule for how much of a person's income should be discretionary, Inc. magazine points out that it would ... Read Full Answer >>
  4. What proportion of my income should I put into my demand deposit account?

    Generally speaking, aim to keep between two months and six months worth of your fixed expenses in your demand deposit accounts. ... Read Full Answer >>
  5. How do I use the rule of 72 to estimate compounding periods?

    The rule of 72 is best used to estimate compounding periods that are factors of two (2, 4, 12, 200 and so on). This is because ... Read Full Answer >>
  6. How much risk is associated with subprime mortgages?

    A large amount of risk is associated with subprime mortgages. Since the mortgages are specifically for people who do not ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!