The end of the year holiday season can be a time of incredible joy and meaning, but it can also be a time of incredible stress. No matter what holidays you celebrate, most of us experience some increase in spending at the end of the year and many people end the year with huge credit card bills.

Planning ahead is the best way to beat the money stress and have a debt-free holiday season. Knowing what you’re going to buy, saving for those expenses, and being able to look for deals will help you spend less and enjoy the holidays with significantly less worry.

Gather Information

Look at what you spent last year. Check your bank and credit card statements for the previous year to get an idea of how much you spent. You can go through each expense listed to determine if it was a holiday expense. Or look at the average amount spent each month and see how much higher it was in the last few months of the year. This will help you get an idea of how much you’ll need this year.
Make lists of everything you’ll need to purchase from airline tickets and hotels to special celebration foods to gifts. Estimate how much each item will cost and add it all together. Check prices for airline tickets and other large ticket items to get a sense of how much you’ll need.

Start Saving

Now that you know approximately how much you’ll need, you can start saving money now. Setting aside an extra $50/week starting in August is easier than suddenly having to find $1000 in December. (These are totally random numbers I’m using for an example and are not meant in any way to be a judgment or recommendation.)

The easiest way to do this is to have a separate account and set up your paycheck to automatically send a fixed amount into that savings account. Then you don’t even have to think about it and you aren’t as tempted to use the money on other things.

Instead of a separate account, you can use an app like YNAB to allocate the money towards a specific goal or just build up an extra cushion in your savings account if you trust yourself to not spend it on other things. The important thing is to find a system that works for you and just do it.

If your budget is tight, now is a great time to reevaluate all of your expenses. Check all memberships and subscriptions cut out anything that you’re not using. Maybe now is a good time to refinance your mortgage or look for cheaper cell phone options.

Another option is to increase your income by finally asking for that raise or getting a side hustle. This option might not be for everyone given that you sacrifice time, but others might find it worth it to bring in some extra money. Many stores hire extra holiday workers or Pinterest is full of ideas for side hustles you can do from home.

Look for deals now

Since you already made a list of things you’re going to purchase for the holidays, you can start looking for deals now. Check baseline prices. Sign up for store email promotions or rewards programs (but not store credit cards). Use price tracking tools to help you find sales without manually searching every week. A flight tracker will help you find cheaper flights.

One of my favorite ways to save is to buy winter items on clearance in the summer. You can find great deals on outdoor clothing, warmer pajamas and clothes, or gear for winter activities. I also plan on taking advantage of school supply sales to get some good stocking stuffers for the kids.

The Bottom Line on a Debt-Free Holiday

Planning ahead makes for a much less stressful holiday season. By the time you get to the holidays, you can focus on fun activities and spending time with loved ones instead of panic shopping and ending up massively in debt at the end of the year. The key is to make a plan and stick to it. If you follow these tips, you can sit back and enjoy the holidays without the money worries. And that, my friends, might be the best gift you can give yourself.

Learn more about saving for irregular (non-monthly) expenses and creating a savings plan that works for you.

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