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Finances in 55: Start Getting Ready for Christmas

It seems like it might be a little overkill: Start getting ready for Christmas already? However, for many of us, Christmas is a very expensive time of year. There are gifts to buy, the house to decorate, people to entertain, and many of us even spend more on festive food and drink for ourselves during the Christmas season. When you consider the extra strain to your budget, it makes sense to start preparing for Christmas [3] a few months in advance.

Before you scoff at the idea of getting ready for Christmas, take a little less than a minute to review what you might need to do during the holiday season. No one’s saying you have to run out and buy new ornaments now; just think about what you might need. Here’s how to evaluate your Christmas season readiness in 55 seconds:

  1. Take mental inventory of what you have: Take a few seconds to think about what you already have: Decorations, left-over bottles of bubbly from New Year’s, toys stashed in your closet that you haven’t gotten around to giving to your children. Think about what you already have so that you aren’t planning for duplicates. (25 seconds)
  2. Consider what you might need this year: Next, consider what you will need this year. Quickly run through the list of people you will need gifts for, and think back to whether or not any lights went out and need replacing. Also, consider whether or not you will be hosting a Christmas party, and what you might need for the party. (30 seconds)

This exercise is fairly simple, but it will help you think about what you might need to do to prepare for the holiday season and get ready for your holiday budget [4]. And you might need it; I know the Christmas season tends to sneak up on me rather unexpectedly.

Preparing Your Finances for Christmas

Think about what you spent last year at Christmas time. If you have good records, or personal finance software [5], refer to this information. This will let you see how much you might expect to spend this year. Depending on how many months you have (I like to count September, October and November), you can divide that amount. If you spent $500 last Christmas, and you figure you have three months to get ready, you will need to set aside $166.67 for each of those months. When December rolls around, you will be prepared without breaking your budget.

If you aren’t sure how much you spent last year, you can estimate your costs and gauge as best you can. But this year, keep track. Make an effort to take notes on how much you spend, and what you spend it on. Start a “Christmas fund” in a high yield account so that you can more readily handle costs. You can also create an inventory of Christmas decorations in order to avoid getting too many duplicates.With a little organization and some financial planning, you will be a little more prepared for next year, and you can plan ahead in a way that helps you avoid breaking your budget each time the holiday season rolls around.

(Photo: premiumkopi [6])