It's early January, and by now you've probably finished off the champagne, put away the menorah, and started taking down the Christmas lights and tree ornaments. It's time to put up your feet, relax a little, and start thinking about ... next year's holiday shopping.
Yes, I know you'd rather be dreaming about sunny summer vacations or building snowmen with the kids. However, if you give the next holiday season a little thought today, you'll save yourself quite a bit of stress later.
Consider spending a little extra time with this exercise if you find yourself dreading your January credit card bills. Look back to Holiday Recovery, Part 1 for more help getting rid of those as fast as possible. Then, read on to figure out how to have a debt-free holiday season this year.
Start thinking about next year's holiday spending by reviewing this year while it's fresh in your mind (and you can still find the holiday receipts). How much did you spend on gifts, decorations, travel, and entertaining? Add it all up. Maybe you spent more than you expected. Maybe you'll be surprised at your skill at using holiday sales to keep your budget low.
Whatever the total, ask yourself whether it seems reasonable given your other spending priorities throughout the year. Ask yourself, also, whether your spending in each category matches its importance in your holiday celebrations. If the holidays mean big family gatherings and feasts, but you spent a ton of money on gifts, then maybe you need to realign your spending. If you put up truly magnificent decorations and enjoyed them every moment of December, then maybe your spending is in line with your favorite way to celebrate.
Make some notes about how you'd like to adjust your spending for next year. Add in a little for any additional gifts or travel you might do come November and December. This should give you a good estimate of the amount to budget for the 2007 holidays.
Now, decide how to set that money aside throughout the year. Consider these ideas:
- Establish a Christmas account. Many banks and credit unions still make these old-fashioned savings vehicles available. They allow you to set aside a certain amount each month, often through a payroll deduction. Then the money's there in December when you need it.
- Make your own Christmas account. A special savings vehicle doesn't have to have a holiday label. Think about opening a savings account at your local bank or at an online bank to stash holiday money away each payday or each month. Put this withdrawal on automatic and you'll avoid that pesky problem of forgetting to make your holiday budget deposit each month.
- Buy gifts throughout the year. Don't wait until November or December to do all your shopping, forcing yourself into a short-term budget crunch at the time when you need the aggravation least. If you buy a gift or two each month from now until next winter, your presents will become part of your regular budget. You may tap into more sales, and you could be less likely to go overboard when the holidays come. It could even add years to your life by keeping away the stress of holiday shopping! Just don't forget where you've hidden the gifts.
- Start working on homemade gifts now. You didn't want to go outside in the cold, bleak winter weather anyway, right? Stay indoors and get to work on your knitting, quilting, pottery, or photography projects for next year's gifts. Maybe all you'll have to do is finish the gifts you had hoped to get done last month but somehow never found enough time to complete.
- Pad your vacation fund. If you're the type who enjoys strolling the shops and checking out the local wares while on vacation, think about taking that opportunity to get some of your holiday shopping out of the way. Dedicate some extra money to your vacation fund for that very purpose. The gifts may be much more unusual than anything you'd find at home, and you'll be bringing a little bit of paradise back to your friends and family.
Whatever system you choose or invent, commit to following it throughout the year. A little planning now can relieve a lot of holiday panic later, and it can leave you a lot more time to spend enjoying the holidays.
If you really want to get on a wild budgeting tear, take a look at these other Foolish articles:
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