Heres how to plan ahead for holiday spending

Heres how to plan ahead for holiday spendingHeres how to plan ahead for holiday spendingYou know how it is. Holiday season sneaks up on you and you suddenly have to buy a bunch of gifts. You have to travel home to see family. And all the while, youre not quite sure how youre going to afford it all. And youre not alone the average American racks up $1,000 in debt over the holidays. But what if there was a way to avoid the stress and debt that comes along with holiday spending? It turns out, there isYears ago, when I was finally making enough money to feel comfortable buying nice gifts for my friends and family, I went a little hog wild and spent hundreds of dollars. I was excited to treat my loved ones for the first time, but then I looked at my budget and was much less emphatic. I had completely blown my discretionary spending for the month. So I then had to recuperate the money by basically becoming a hermit until the new year. I decided I didnt want to feel that way every year, and I came up with some solutions for myself. And now you can use them tooPlan out your travel spending earlyIf you have to travel for the holidays, dont wait too long to buy your flight or other mode of transportation. Waiting until it gets too close to the date will mean you spend a lot more money. The holidays are typically always an expensive time to travel, but youll be better off if you plan ahead. parte of planning ahead is also prioritizing which holidays you want to travel home for. If you are working with a limited budget, you may not be able to go home for every holiday. Decide which ones are the most important to you, and stay put for the others.Look back at last years spendingIf youre going to make any changes or plans, you need to know where youre starting from. Get a good baseline for how much you typically spend. Go through your bank statements from the last couple of years and add up what you spent. This should include gifts and any travel expenses that you had to incu r. Will this years circumstances be any different? Are you happy with the amount you spent? Do you want it to be higher or lower? With this information, you can plan accordingly.Make a list of those you want to buy gifts forYou dont have to buy a gift for everyone you know. If you cant afford to buy gifts for everyone who is important to you, you have to prioritize. Theres no shame in that. So, who are the people you absolutely want to buy gifts for this year? You can make a tier 1 (must gift) and tier 2 (maybe gift) list, based on what your budget will end up being. If you have a really big family, it may be completely unreasonable to get a gift for every single rolle. A great solution is this throw everyones name into a hat and have each person pull a name out. That is the person they have to buy a gift for that year. Thats what my family does It seriously cuts down on spending and takes a lot of the pressure off.Save all year longThe real key to planning for the holidays is to s ave throughout the year. Create a savings account that is just for holiday spending and gifts. That way, youll always have money set aside for it. Figure out how much you want to spend each year and divide that amount by 12. That is how much you need to save each month in order to have enough to cover your spending. Make sure that you automate it so that you dont have to think about moving the money yourself. Set it up through your paycheck direct deposit, ask your bank to move the money, or use an app like Digit.Buy all year longI dont mean you should just buy everything you see all year long. Thats not a good strategy for your budget. But it actually might be cheaper and easier if you buy gifts throughout the year instead of waiting until November or December. It would be easier to include individual gifts in your normal discretionary spending month-to-month, rather than buying them all at once. Plus that way, you can buy things that remind you of your loved one as you see them, a nd you wont have to think too hard later on. Just dont forget where you put the giftsMaggieGermanois a feminist and financial coach for women. She helps women improve their relationship with money so they can take control of their financial future. She does this through one-on-one financial coaching, workshops, writing, and speaking engagements. She also foundedMoney Circle, which is a safe space for women to talk about money without feeling judged. Its a way to create community and openness around personal finance. Passionate about many issues affecting women,Maggieis a member of theWomens Information Networkand was trained as a salary negotiation facilitator byAAUW.Thisarticlewas originally posted on MaggieGermano.com.