Yes I know it’s July but ever look at your bank or credit card statement in January and say, WHAT HAVE I DONE?!?!?!?

Yeah, me too!  I get caught up in the holiday frenzy and totally forget what a budget is.  Too much of getting caught up and that can lead straight to what I call, the Holiday Debt Hangover.  Statistics show that families go at least $500 in debt every year during the Holiday season.  What that can lead to is a cashflow problem that impacts you for months after the season has come and gone.  You have to be intentional with your holiday spending to avoid debt and save along the way.

The difference between my holiday spending NOW vs years ago is that now I plan ahead and budget for ALL my holiday spending.  I’m emphasizing ALL here because my budget didn’t include the hidden expenses of the season.  What are those hidden expenses you ask?  Here are a few:

• Decorations – Yes, I like to refresh or add to my decorations every year so I pick up a “few” new items.   
• Shipping – This year especially, we may have to ship more of our gifts instead of delivering them in person.
• Holiday Events – Our social calendars generally tend to fill up during this time of the year, so don’t forget about the additional budget that will be needed for things such as an outfit to wear, a dish or gift to take to an event, or event tickets to purchase. 
• Extra Holiday Meals – I’m not talking about Thanksgiving or Christmas dinner (those should already be included in the budget), I’m talking about the extra eating out activities that happen while shopping, visiting family or those last minute get togethers.  (One year when our family got together, we decided to all go to the movies.)
• ME Gifts – Those items that you see for yourself that you just can’t pass up. 😊

I start creating a plan early in the year so that I have plenty of time to build up the holiday fund.  The Holiday season starts in exactly 140 days, with Thanksgiving officially kicking off the season.  Getting organized early is key to staying within budget.  Here is how I approach holiday planning.  I start by filling out my Holiday Budget Planning Checklist.  Grab your copy here.  After I fill out the checklist I then come up with my REAL budget.  (We all know that what we want and what we should or can afford to do are 2 different things.)  Then I come up with a plan to completely fund my budget.  Ideally you should already have some of your holiday money set aside.  (Although with everything that’s going on, this probably has taken a back seat.) 

This year I plan to be a lot more creative when it comes to gifts, the more personal the better.  Since I am all about increasing financial literacy it will definitely be something related to learning more about money, especially for my nephew.  It’s so important to get children started now learning as much as they can about money. 

Have you started saving for your holiday spending?