The holiday season is special. It is one of the most highly anticipated times of the year – but it can also be stressful and financially draining. How can you take simple steps now to prepare for “the most wonderful time of the year”?

It’s easy! Start early, stick to your plan and add these five steps to your holiday routine.

The holidays do not have to be in July to keep your budget as cool as the snow in December. You just need to plan early for the gifts, cards, decorations and events. If you start planning in early, you won’t have to spend your January worrying about paying off the holiday debt. Start the new year right by budgeting for the holidays now!

Approach the holidays differently this year with five easy steps to reduce stress, stick to your budget and make the holidays magical again.

1. Set up a separate holiday savings account

Create a gift-giving list that lays out how much you are going to spend on each person. You don’t have to know what gift you are going to give them now - but set a maximum amount that you are willing to spend. Even if the season’s trendiest toy is over budget, remember you set your limit months in advance - so stick to them.

Be sure to include a small amount that can cover unexpected costs such as a new neighbour that you don’t normally buy for or a new event that hasn’t happened in the past.

Only pay for your holiday expenses out of this account. It will help you track what you are spending and force you to stay within your budget!

2. Make a regular contribution to your holiday savings account

Once you have an idea of what the holiday season will cost you, work backwards. How much do you need to save each week leading up to your holiday shopping days?

If your budget is telling you that you need $2,000 to cover your holiday expenses and you want to start saving on July 25, you will have 18 weeks to save (if you plan on starting to shop on December 1). This means that each week you should have $112.00 transfer with a Pre-Authorized Contribution to your holiday savings account.

3. Get creative

If you think that the dollars in your holiday savings account might accidently get used for other expenses, you can get creative. Order gifts cards to your kid’s favourite stores and put them aside. This way, you won’t spend the dollars elsewhere. You could buy $50 or $100 gift cards each week from July until December and then be sure to shop in those stores only for gifts.

4. Shop online

It might seem like a strange tip, but did you know that when you shop online you are more likely to stick to your shopping list? Without the sparkle of an unneeded item catching your attention in-store you are more likely to stick to your list and to your budget!

5. When you buy a gift – write it down!

It’s great to have budget and to know how much you want to spend on each person but sometimes, especially when we are trying to buy gifts in advance, we forget we already bought a gift for someone on our list! This can mean spending double the dollars due to unorganized tracking. Once you decide what you want to buy a special person on your list, write it down, buy it, and then note that it has been bought and where the gift will be kept.

Just remember to keep your list in a place you can easily access like in a daily agenda or day planner.

*Bonus gift-giving tip!

Looking for something meaningful and easy on your bottom line? Get a few nice pots and plant some seeds. Tend to them and watch them grow into thoughtful and meaningful gifts. During this time, your bank account will grow too! The holidays do not have to be in July to have an affordable gift-giving season, but you can start planning now!
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Budgeting is the gift that keeps on giving

If you have a plan and put money aside each month leading up to the holidays, you will stress a lot less about spending when December comes. Budgeting habits will extend beyond the holiday season. It is a tool that will help you reach all your financial goals.

Talk to a financial planner today!