While you might groan when you see winter holiday decorations, gifts, and candies in the store well before Halloween has come and gone, the months leading up to the holiday season are the perfect time to plan out a budget for holiday expenses. The glitz and glamour of the season, plus the inclination to buy gifts for others, typically leads to a lot of spending. Last year, the average shopper estimated that he or she would spend $740 on gifts, according to a Gallup poll. That $740 needs to come from somewhere, and in the best of worlds, it won’t be adding to your credit card debt. Start planning for the holiday season today so that you can avoid a heartbreaking credit card bill come January.

Make a List; Check It Twice

Make like Santa Claus and put together a list of everyone you’d like to buy a gift for, in a perfect world. Add in how much you’d like to spend on each person’s gift, then add up the amounts of each gift. Don’t forget to include everyone you might have to buy a gift for on this list, such as the office Secret Santa, your kid’s room parent, and your babysitter.

After you’ve made a gift list, create another list for holiday expenses for decorations and any parties you’ll be hosting or attending. Think of any decorations you’ll want to purchase this year, such as a Christmas tree, fresh candles, or new tinsel. When making the list, take a peek at any decorations you have packed away. It’s easy to forget what you have when it’s been stored away for 10 months. Estimate the amounts that new decorations will cost and that food and supplies for parties will cost, and add them up.

Start Saving

Now that you have a general idea of whom you’ll be buying for and what you’ll be buying, it’s time to start saving up the money. Compare the amount you expect the holidays to cost you to the rest of your budget so that you can figure out a way to stash some money aside. It can mean that you need to cut back in certain areas to make room for the added holiday expenses. For example, if you go out to eat often, try cooking at home more in the months leading up to the holidays. Put the money you would have spent dining out in a savings account dedicated to holiday spending.

Beware of Deals

It’s easy to get excited about a shirt that’s 60 percent off or a television that’s selling at a rock-bottom price. You were going to buy the item anyway, and now you’ve gotten it for a steal. But, if you then go and spend the money you saved on an extra gift that wasn’t in your budget or end up spending more than originally planned on other extras, you haven’t really saved any money. If something you were planning on buying anyway is marked down, take the deal and stash the savings aside for a rainy day. Avoid the temptation to buy something just because it’s on sale or described as a fantastic deal.

Holiday spending doesn’t have to wreck your budget or plunge you back into credit card debt. Look at your holiday expenses as a short-term financial goal. The sooner you start planning and saving for the holidays, the more you’ll be able to kick back and enjoy them, stress free.

Image source: Flickr

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