How to Plan Your Holiday Spending Budget Now

If it feels like you blinked and the end of the year is here, I’m right there with you. 

With each passing year, it seems like the time between summer vacation and holiday planning gets shorter and shorter. You might think the easiest thing to do is just avoid looking at your calendar until the last minute. However, that strategy can be a recipe for disaster – not only for your stress levels, but for your bank account, too.

We all have busy lives, so you probably have a ton of things on your to-do list that feel more urgent than planning a holiday budget. Still, mapping it out now can ultimately save you a headache (and money) later on. 

Here are some ways to get a head start on putting together your budget this holiday season. 

Prepare for Your Usual Holiday Expenses

It’s ironic that we often feel blindsided around the holiday season since it happens at the same exact time every year. While there may be some minor differences from year to year, you usually have a general idea of who you’ll be buying gifts for, whether you’ll be traveling for the holidays, and other important details.

With that in mind, it’s a good idea to start taking steps to get organized for your expected holiday expenses over the next couple of months. If you usually invite friends and family over for dinner, estimate what it will cost to entertain your guests and start setting some money aside. If you’ll be flying to visit relatives, set up flight alert notifications and make plans to purchase your tickets before prices skyrocket.

Knowing how much you expect to spend can also help you figure out which holiday parties to attend. You might feel guilty about declining to attend some functions, but knowing what your budget can handle now can make it a little easier to say no.

Set Up a Holiday Savings Account 

I have a confession: I currently have six savings accounts. While this might seem excessive, there’s a method to the madness. I know how hard it is for me to mentally separate money for specific purposes, so I save myself the trouble by keeping it spread across different accounts.

If you find yourself with the same dilemma, now is the time to set up a savings account just for holiday spending. You won’t have to worry about accidentally spending money on your everyday purchases and you can physically see how much you have to spend once you start your shopping.

To make things even easier, set up automatic transfers to your holiday savings account. This way, you can set aside the money you need without even thinking about it.  

Reduce Some of Your Spending 

Before you dismiss this advice completely, I’m not telling you to be the poster child for frugality. However, if you want to add some extra cushion to your holiday budget, it might be worth cutting back on a few expenses for the next month or so. 

For example, if you go out to eat several times a month, try going out two to three times until the holidays. You can also have movie nights and coffee at home or consider pausing some of your recurring monthly subscriptions for the next couple of months. Every little bit helps, and if you know the semi-extreme frugality is on a short-term basis, it might not be as painful. 

Stick to Cash or Gift Cards

Are you planning to use a credit card to cover most of your holiday shopping? If so, you might want to think twice. A 2018 survey found that one in four shoppers were still paying off credit card purchases made during the previous holiday season, and 73 percent had plans to use credit cards for the upcoming holidays.  

As tempting as it can be to swipe that piece of plastic and worry about how you’ll pay it back later, you don’t want to spend the next year chipping away at debt for gifts you bought on one holiday. It’s also easier to overspend and buy things you really don’t need all in the name of the “holiday spirit.”

 So, avoid the temptation to spend excessively and make plans to stick to a cash-only system. Once you have the money saved up, withdraw the cash and take it with you if you plan to go out shopping. If most of your purchases will be made online, consider using a prepaid gift card. It’s an easy and painless way to get all of your shopping done, without spending more than you can afford to pay off later. 

Earn Some Extra Cash

The holiday season is busy for most companies, which means you’ll have plenty of opportunities to add a few extra bucks to your holiday budget if you need to. To make things simple, start off with your day job. It’s common for employers to offer overtime around the holidays, so let your boss know you’re interested in picking up some extra hours. 

If your job doesn’t have overtime available, look into ways you can make extra money after hours or over the weekend. Some options to consider include tutoring, babysitting or pet sitting. You can even taking a seasonal job. If you manage to snag a gig in retail, you might even get some nice discounts for your holiday shopping!  

Keep Track of Your Budget

All of your careful planning will go out the window if you make a budget now and neglect to actually use it once you start your holiday spending. Instead, take note of what you’re spending so you know whether you’re on track or on the verge of going over budget. 

I’m not telling you to whip out your calculator while you’re at the store and track every penny. Yet, it’s helpful to check in on your budget at least once a week during the holiday season to get an idea of where you’re at and if you need to adjust.

Make This a Happy (and Debt-Free) Holiday Season 

Most of us manage our money pretty well throughout the year, only to throw caution to the wind during the holidays. You’ve probably worked really hard to save and stick to a budget, and it’s okay to use those same strategies during the holiday season. 

With a little planning, it’s totally possible to get special gifts for your loved ones and still stay on track with the rest of your financial goals. 

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