7 Tips to Keep you On-Budget This Christmas by Paula Pant

It's that time of year again. Stores are running festive commercials, your local coffee shop is offering gingerbread lattes, and you're beginning to worry about how you're going to afford another round of "the most wonderful time of the year." There's no doubt about it; the holidays are expensive. From gift-giving to party-throwing, the holidays can be overwhelming if you're on a tight budget. Let's take some of the stress off your shoulders with some short-term tips for reducing the damage to your budget if you haven't pre-planned for the holidays this year -- and then outline a long-term strategy you can use to budget for the holidays next year so that next winter runs a lot more smoothly. Help! I'm Just Thinking About Holiday Expenses Now It's too late to "get a jump" on saving in advance for this holiday season, but that doesn't mean you're stuck paying through the nose. These budgeting tips will help you make the most of the money you've got for this season, however much money that happens to be.

1. Decide on Your Budget Be honest with yourself about how much money you can responsibly spend this year. Creativity and bargain-hunting can help you stretch your money a bit further, but only if you're realistic about how much money you have in the first place. How do you calculate this amount? First, take a look at your existing budget. How much do you normally spend each month on discretionary items like restaurant dining, magazine subscriptions or cable TV? Can you cut any of these bills -- at least temporarily -- while you save for the holidays? In other words, "reallocate" some of your discretionary spending towards your holiday budget. You can either afford to dine at restaurants or you can cover presents for your family, but you might not have space in your budget for both.

2. Lists Are Your Friend Last-minute emergency purchases are the easiest way to throw your budget into a tailspin. Writing lists can help you remain on track. Write down everyone you'll need to buy presents for this year -- family, friends, the office Secret Santa -- and write the dollar amount you have to spend on each person. Write down all the festivities for which you'll need to buy food and drink, from the family Christmas Eve dinner to the New Year's Eve bash you'd like to bring a bottle of wine to. Outline all the travel-related expenses you'll incur. Remember you won't just have to pay for airfare and lodging, but also for meals on the road, boarding for your pets while you're away, public transit or airport parking. Continue making lists of everything you'll need to spend this holiday season, from gifts to travel to parties. You may need to cut back in one area to make room for another -- for example, you might forgo mailing holiday cards so you can afford stocking-stuffers. 3. Shop Smart There are lots of ways to save on holiday gifts. Take the time to bargain-hunt and get creative by employing tricks like: • Booking your holiday travel during non-peak days (You can often find great deals if you're willing to fly on Christmas Day.) • Scanning group-buying sites like Groupon, Living Social and Amazon Local to snag services and products at a discount • Asking party guests to contribute a dish to your gathering (potluck-style) so you don't have to pay for the whole meal • Tapping into your own skills to create homemade DIY presents • Giving experiences rather than things • Shopping through cash-back reward sites to earn back a percentage of your purchase

4. Tweak Your Budget Temporarily If you're really up against a wall, you may want to institute an emergency budgeting protocol like you would for an unforeseen large expense like a home repair or medical bill. You can free up some extra room in your budget with temporary measures like: • Slashing other areas of your budget -- maybe you can forego eating out for the next couple months, or lower your cable plan since you won't be home to watch much TV anyway • Selling your unwanted stuff • Putting other savings goals (like your family vacation) on hold for a month or two • Check out a list of other saving ideas Long-Term Strategy Once this holiday season is over, it's time to turn your attention to next year. Yes, it's a full year away, but the sooner you get started, the easier it will be on you. Here are a few tips that can keep you in the holiday spirit all year long:

5. Start in January Don't let the holiday season creep up on you again. Start setting aside money as soon as the New Year starts. If you get paid every two weeks, divide your holiday budget by 24. This is the amount you should set aside from each paycheck into a "holiday savings" account. If you get paid monthly, divide by 12 and automatically divert that money into your holiday savings fund. This habit will save you from another moment of sudden panic when you realize the holidays are right around the corner. It'll be much easier to spend a little less throughout the year than to find yourself needing to drastically slash all your spending next November or December. In fact, planning for holiday spending can get you thinking about year-round budgeting tips.

6. Open a New Savings Account You don't want to dip into your holiday money before it's needed, so open up a separate savings account specifically for the holidays. Keeping this money separate from your other savings goals will help you monitor how much you've set aside and will safeguard you from accidentally using that money on other things. You can even involve your kids in your newfound focus on budgeting by teaching them money management.

7. Make It Automatic The best way to stick to any savings goal is to remove the potential for human error. Don't rely on your ability to remember to set money aside for the holidays each month, and definitely don't count on your having money "left over" at the end of the month. Instead, set up an automatic transfer each month from your checking account to your holiday savings account. Schedule it for the beginning of the month or arrange it to coincide with your payday. This money will be automatically allocated to savings before you have a chance to spend it on something else.