It's Time to Prepare Your Finances for the Holidays

I hate to break through your pumpkin spice daydreams, but surprise! The holidays are right around the corner. If you plan to participate in any level of holiday cheer in the next couple of months, your money is going to need to be ready. So put down that latte and take three steps to strengthen your finances right now. You can have your pumpkin spice back in a moment, I promise.

Book your travel

If you haven’t already made travel plans to visit family or friends—or just get the heck out of town—do so right away. Booking flights at least six weeks in advance often gets you the best price, and the lower prices are, the more demand there will be for basic and regular economy seats.

Some flight aggregators show you whether the trip you’re considering is a good price, or if it might be worth waiting to buy or choosing another day to travel. Google Flights, for example, allows you to peek at a price graph by day, and a box tells you if prices for your trip are low, typical, or high.

Make a budget

I know, you’re tired of being told to make a budget. But when the holidays roll around, it’s time to make an extra budget specifically for the holidays. Because you know that beyond gift-giving, the season is rife with once-a-year expenses.

Take a look at last year’s spending to plan for this year; if you didn’t track your expenses for previous holiday seasons, make a plan for each of the following categories:

• Food and drink for gatherings you host or attend
• Tips for your regular service workers (hair stylist, house cleaner, babysitter)
• Travel costs, including flights, rental cars, gas and tolls, or ride-hailing services
• Gift exchanges at work or school
• Decorations, like a live Christmas tree
• End-of-year donations 

Make a plan for your debt

I don’t advise going into debt to pay for holiday expenses, but if you already have credit card debt, you might be feeling like you’re not allowed to have any fun while everyone else is being merry. I’m here to tell you that even if you’re in debt up to your ears, you still deserve to have a good time. Your celebration may not be as grand as you might hope, but remember that a budget is a living document. You can adjust it from one month to the next to meet your needs.

If you’ve been aggressively paying down your debt all year, maybe you can dial it back to making regular payments for October, November and December to make sure you have cash available at the holidays.

If money’s still tight after making payments toward your debt, consider buying gifts on layaway. It’s gotten a bad rap over the years for having service fees and requiring down payments, but many stores have made it easier to pay for items on layaway. You won’t have that instant gratification of taking items home with you to wrap that day, but you’ll be able to plan ahead for manageably payments ahead of the day you exchange gifts.

How are you preparing your finances for the holiday season? Are you doing anything differently than you did to get ready in previous years?

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