Start your budget before the holidays

The temperatures are finally dropping, patio season is back and the holidays are sneaking up fast. Before you know it, your calendar will be packed with parties, travel and a gift list that somehow keeps growing. The good news? Holiday fun doesn’t have to come with a January credit card statement you’re afraid to open. Having a holiday budget now can help you enjoy the season without the post-holiday money hangover. Let’s get into it!

Why should I start my holiday budget now?

Think of it this way: a budget made in the fall is a plan. A budget made on December 20 is damage control.

Starting early gives you the one thing money can’t buy: time. Time to spread costs across a few paychecks. Time to watch prices and catch real deals. And time to have honest conversations with family about this year’s celebrations before anyone hits “add to cart.”

It’s also important to remember that a holiday budget doesn’t make you a Scrooge. It’s about deciding where your money goes ahead of time, so you can actually enjoy the season instead of stressing about it.

Where do I start?

Start by looking back. The most useful info for your holiday budget is already sitting in your bank account. Pull up last November and December and add up what you actually spent. Not what you meant to spend, but what really left your account.

Fair warning: the number might surprise you. Gifts are only part of the story. Last year’s spending will also show the little things that slipped through, like the extra grocery runs, the last-minute stocking stuffers and the takeout you ordered because everyone was too tired to cook. That number is your starting point.

What should my holiday budget include?

When most people think of holiday spending, they think of gifts. But gifts are often only half the total. Here’s what else to plan for:

• Gifts: Family, friends, coworkers, teachers and anyone else on your list.
• Travel: Flights, gas, hotels, pet boarding and airport parking.
• Food and entertaining: Holiday dinners, parties, potlucks and all that baking.
• Decor: Lights, trees, wreaths and that one inflatable you swear you’ll skip this year.
• Wrapping and shipping: It’s sneaky and it adds up.
• Tips and thank-yous: Your mail carrier, sitter, stylist and other everyday helpers.
• Events and outfits: Holiday parties, concerts and yes, the ugly sweater contest.

Write it all down. If a category doesn’t apply to you, cross it off. If it does, give it a number.

How do I set a total I can stick to?

Decide what you can comfortably afford. The key word is comfortably. Your holiday budget should come from money you have or will earn before the holidays, not money you hope to have in the new year.

Start with your total and divide it up by category. Then break your gift budget down by person. Putting a dollar amount next to every name on your list turns an open-ended shopping trip into a focused mission.

If the numbers don’t fit, now’s the time to adjust. Draw names for a gift exchange instead of buying for everyone. Host a potluck instead of a catered dinner. Set a spending cap with your siblings. These conversations are a lot easier now than they are in mid-December. And don’t apologize for having priorities. Your people care about you, not the price tag.

How do I actually pay for it all?

Here’s where starting early pays off. If you start saving the first week of November, you have about six weeks before the big December shopping push. Let’s see what that looks like with two different budgets:

• Scenario one, a $500 holiday: Maybe you’re keeping it simple this year with gifts for close family and a potluck or two. Spread over six weeks, that’s about $85 a week, or roughly $170 a paycheck if you’re paid every other week.

• Scenario two, a $1,000 holiday: Maybe you’ve got a bigger gift list, a road trip to see family and a party to host. Over the same six weeks, that’s about $170 a week, or roughly $335 a paycheck.

Either way, a few smaller transfers feel a lot easier than one big hit to your account in December. And if neither number fits, use the same math with your own total.

Try opening a separate savings account just for the holidays and set up an automatic transfer on payday. That way the money moves before you have a chance to spend it on something else. When it’s time to shop, you’re spending money that was set aside for exactly that.

What are some other ways to stay on track?

A holiday budget comes with some compromise, but it doesn’t have to come with sacrifice. Here are a few ways to keep spending in check without missing out on the fun:

• Shop with a list: Keep a running gift list on your phone so you don’t double-buy.
• Watch prices early: Deals now start well before Black Friday, so keep an eye on the items you want.
• Unsubscribe: Promo emails are designed to tempt you. Hit unsubscribe and skip the impulse buys.
• Check in weekly: Log what you spent and compare it to your plan. A spreadsheet, an app or the notes on your phone all work.
• Borrow from yourself, not your card: Go over in one category? Pull from another instead of growing the total.
• Pay with what you have: Cash or debit keeps you honest. If you use a credit card for rewards, pay it off in full each month.

Give yourself the gift of a calm January

The holidays are about connection, generosity and rest. None of that feels very restful when you’re worried about paying for it. Starting your holiday budget now means trading panic for planning and a new year without regret.

So pull up last year’s numbers this week. Pick a total that fits your life and start setting money aside on your next payday. Your future self will thank you when January rolls around.

Also, remember that money is personal. You work hard for yours, and you should feel good about how you spend it. Looking for more ways to reach your financial goals? Join today and get all the perks of membership! Plus, get access to free webinars and more.