Checklist: 7 Tips to Stay on Budget This Holiday Season

It's officially fall—and that means it's time for cozy scarves, apple picking, all things pumpkin spice and, of course, holiday shopping.

One of those things might sound a little more stressful than the others—and we know why. Holiday shopping can turn your financial plan upside down without proper preparation and execution. But we're here to help you answer the fundamental question: “How can I stay on budget during the holidays?”

Here's where to start:

1. Create a budget

   First things first, you need to know how much you can actually afford to spend this holiday season without falling into a debt spiral. If you want to know begin with a budget.

   Use an app of your choosing, an Excel spreadsheet or good, old-fashioned pen and paper to write down all of your expenses and subtract those from your monthly income. Once you've accounted for housing, utilities, food, transportation, subscription expenses, savings and other monthly bills, the remaining money can be allocated toward holiday shopping and extracurriculars.

   If you can, try to factor in a little extra for emergencies, gift-related or otherwise.

2. Make a list

   Next, make a list of who you'd like to buy gifts for. Start it early, because there's always one or two people you forget about until they show up at your door with a gift bag.

   Begin with immediate family members and close friends, then expand it to extended relatives, neighbors and coworkers. A helpful hint if you’re a chronic list keeper: Revisit your thank you card list from last year to get an idea of who you can expect gifts from this year.

   Next to each name, write a rough estimate of how much you'd like to spend. Determine the price limit first to ensure you don't panic, make impulse buys and overspend.

3. Shop ahead of time—and watch for sales

   Once you know who you have to shop for and how much you want to spend, start doing some research.

   If you've decided you want to spend $15 on a coworker, start brainstorming gift ideas and look online for the best price. If they're an avid reader, and you know there's a book they would love, find out where you can get it for $15 or less. Repeat this process for everyone on your list.

   If you have the time, look at whether shopping online or in-person offers a better price—many websites have digital coupons. Be sure to account for shipping costs if you choose the online route.

   Also, be aware of big sales and special offers, but don't fall victim to every marketing ploy. “Black Friday” sales, for example, aren't always the hottest deals available. We've just been trained to think they are. Take the time to shop around—you may be shocked at how much money you can save.

4. Take advantage of your credit cards

   As you shop around, consider using credit cards to your benefit.

   Spending cash is a perfectly fine way to purchase your holiday gifts but if you use your credit card, you may be able to earn a significant amount of points toward cash back or rewards.

   Figure out which points mean the most to you—cash back or in-store discounts—and which one of your credit cards would earn you the most points. Designate that card as your holiday shopping card, and then make a plan to pay it off on time.

   If you don't have a rewards card, your local financial institution can probably set you up. Keep in mind that responsible credit rules still apply during the holiday season, so don't overspend, and pay off your balance as soon as possible.

5. Get creative with your gifts

   If you've made your list, consulted your budget, and just can't find enough cash to get everyone the gift you'd like, don't stress. You're not alone. Spending less on a gift doesn’t automatically make it less meaningful. There are plenty of low-cost, creative and thoughtful gifts to show others you care.

   Get-togethers, for example, can be invaluable to friends and family members. Plan a potluck dinner that takes the pressure off everyone's wallets and provides an opportunity to catch up and share the holidays.

   Another way to share is to give to those less fortunate. Charities always need help, particularly during the holiday season. Ask your friends if they'd be willing to give back to the community as a gift to each other. Or consider donating to an organization in someone else's name—it will brighten their day and make a difference in the world. For larger groups, consider organizing a Secret Santa gift swap. Everyone will feel included but won't stress about shopping for multiple people.

6. Track your spending

   However you choose to spend this holiday season, keep careful track of how much you spend, where you spend, and who you're spending on.

   Tracking your money this way will help you stay on budget. Holiday stress can cause some people to throw caution to the wind, but not you—you've prepared yourself (and your budget) for the occasion.

   Secondly, take careful notes to see where you may have overspent and how much you can expect to spend next year, which brings us to our final tip:

7. Automate your savings

   If you find budgeting for holiday shopping too stressful, take some of the work out of it by automating a savings account.

   Look at how much you spent this year, divide it by 12, and set up a direct deposit from your paycheck or checking account into a savings account each month. By this time next year, you'll have the money put aside and ready to spend. And you'll have a list of people to shop for which you can edit as necessary.

Holiday shopping doesn't have to be a budget buster. With a little bit of planning, it can actually be a fun, simple and affordable process. Do you need help with budgeting or managing your finances? The experts at Mountain America Credit Union are available to help.