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Five steps to deck the halls without wrecking your budget

What we'll cover

  • Steps to create a holiday budget

  • How to map out your budget ahead of time

  • Tips to help stick with your budget

The crisp morning air, warm pumpkin-spiced lattes and ads for holiday deals playing on TV. Fall is here, which means now is a great time to start planning your expenses for the upcoming months of winter 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 that’ll help you avoid that post-New Year’s holiday spending hangover.

Step 1: Create a spending limit.

The first step of creating any holiday 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 that could potentially rack up debt. To do this, start by looking at your overall monthly budget , as well as your savings.

If you’ve been setting aside savings specifically for the holidays, you can easily create your budget with the funds you have built up. If not, you may have to look for other areas in your monthly budget or potential windfall money you can allocate 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

  • Other

Once you have a broad outline, you can break those categories up into specifics. Dive into the nitty gritty and make sure you account for all possible expenses. You’ll want to split up your gifts category by each person you’re shopping for. If you’re traveling, make sure to think about the details like gas , pet lodging (and other Fido-related costs) , baggage fees , etc. Your other bucket might include a donation to your favorite community organization, an outfit for your annual New Year’s Eve soiree and any other expenses that don’t immediately come to mind.

Step 3: Allocate funds.

Divvy up your holiday budget by prioritizing the items on your list that are 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.

To keep everything organized, our Online Savings Account allows you to create up to 10 different buckets (think of them as digital envelopes) within one account (versus needing multiple savings accounts ). You can establish specific buckets for your different holiday season savings categories and turn one of the most stressful aspects of the holidays into a breeze. You won’t need to do mental math to see how much money you have left for each spending category, so you can easily stay on track with your budget and have more energy for entertaining your family members and staying up late to wrap gifts .

Buckets can help you save for multiple goals at once, prioritize and organize different savings needs and even provide a boost of motivation you didn’t know you needed. Make the most of this tool with these tips:

  • Creatively name your buckets to help you visualize what you’re saving for. (Think: cranberries and stuffing instead of Thanksgiving.)

  • Set up automatic transfers to your buckets, so you won’t forget to save.

  • Make your buckets for broad or specific savings goals — there’s no right or wrong way to use them.

  • Temporarily pause transfers to non-holiday-related savings buckets if you want to put extra focus on the upcoming season.

  • Try a  microsaving  strategy to add to your buckets little by little each day.

  • Create a bucket dedicated to a gift … for yourself. You deserve it!

Step 4: Shop early.

The best part about determining your budget before the eggnog hits store shelves? You can start shopping ASAP, so let a holiday do-date calendar serve as your guide. 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. 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 . While you may not need to check your bank statement every single day, it’s a good idea to review how you’re tracking against your budget about once a week. 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 (and holiday cheer, of course), it can be tempting to use your credit card at every website you surf or at every store you pass by. But if you stray too far from your budget, your pockets may still feel the effects of the holidays long after all the string lights are put away. That’s where some thoughtfulness, creativity and a DIY attitude can help.

Try to keep your décor budget-friendly by repurposing ornaments from past years, hitting up Pinterest for DIY projects that will keep the kiddos entertained or swapping decorations with friends or family.

Shop smart for gifts by always bringing a pre-planned list with you to the mall. Don’t let sales tempt you into buying things you don’t need (that goes for online, too). Find areas where you can make gifts yourself — like baking cookies for your neighbor or crocheting blankets for your niece and nephew. And finally, don’t be afraid to ask friends or family to skip the gift swap this year if you have to save room for other needs.

Deck the halls, not your wallet

As the leaves turn from green to red, don’t let the upcoming festivities take your bank account from green to red, too. 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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