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5 steps to build and stick to a holiday budget

The holiday season is a time for making memories and keeping cozy — and it's all the more enjoyable if you've already  planned your expenses for the festivities. By mapping out your budget ahead of time, you can keep your spending in check as spooky season turns into the most wonderful (gift-giving, party-going, home-decorating) time of the year.

Follow these five steps to create and stick with a holiday budget.

Step 1: Create a spending limit.

The first step of creating any budget is determining how much money you have to work with — that way, you can better stay within your available cash and avoid having to dip into credit cards. Start by looking at your overall  monthly budget , as well as your savings.

If you’ve been setting aside savings specifically for the holidays, that's great — you have your limit in place. If not, you may have to look for other areas where you can allocate funds toward the winter holidays. Maybe that means redirecting your monthly take-out money or pausing a few subscriptions to free up some cash. Or perhaps you have an upcoming holiday bonus from work that you can tap into. No matter how you plan to fund your winter fun, be realistic (and firm) about your holiday spending cap.

Step 2: Map out your expenses.

Now, it’s time to consider exactly what you’re going to put your money toward. Try creating a spending list by category. It could look something like this:

  • Gifts

  • Decorations

  • Travel

  • Meals

  • Parties or hosting

  • Donations

Once you have a broad outline, you can break those categories up into specifics. You’ll want to split up your gift category by each person you’re shopping for. If you’re traveling, make sure to think about the details like gas,  pet needs , baggage fees , a holiday outfit, etc.

Step 3: Allocate funds.

Prioritize the items in your holiday budget by what's most important to you. Be realistic about how much money will go toward each item and take the time to play with the numbers until you’re comfortable with how you’ve allocated your budget.

Keep your budget somewhere you can easily see and access, and try giving each category a visual name (for instance, "tinsel and wreaths" instead of simply "holiday décor").

Step 4: Shop early.

The more time you give yourself to purchase your holiday gifts, Thanksgiving tablescape or NYE streamers, the more likely you are to find deals and save money — and find the perfect gifts. Without the pressure that comes with leaving all your shopping to the last minute, you can spend more time perusing online for the best sales or getting creative with DIY decorations and presents.

Step 5: Track your spending.

Don’t let all the work you put into building your budget go to waste: Make sure you track your spending  once a week or so. That way you can monitor if you’ve gone over your limit in a certain category and need to reallocate your funds — or you may find you’re coming up under budget and have some new-found cash to work with.

Tips for staying within your budget

When you’re surrounded by sales, it can be tempting to use your credit card for extras. But if you stray too far from your budget, your pockets may still feel the effects long after the holidays. Here are some ideas for staying within your budget:

  • Repurpose ornaments from past years, hit up Pinterest for DIY projects that will keep the kiddos entertained or swap decorations with friends or family.

  • Shop smart by creating a pre-planned list to stick to when you're doing your shopping (at a physical store or online). Don't let sales tempt you into buying things you don't need.

  • Find areas where you can make gifts yourself — like baking cookies for your neighbor or crocheting a blanket for a relative.

  • Don't be afraid to ask friends and family to skip gifts this year — or do a secret swap, so you only need to buy for one person.

Deck the halls, not your wallet

By taking the time now to create a realistic and achievable budget for the holidays, you can be sure the months ahead will be merry and bright — without taking an unexpected toll on your wallet.

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