How to Get Your Holiday Budget in Order Before the Season Starts

Expert guidance for spending wisely, shopping with a plan, and sidestepping a post-holiday money hangover.

Holiday shopping has a habit of arriving sooner than expected — sometimes before the Halloween decorations are even packed away.

Still, there’s an argument for getting a jump on the season: starting earlier may actually help your finances instead of hurting them.

More than half of U.S. consumers said they planned to start winter holiday shopping in October or earlier, according to a Gartner survey. At the same time, nearly 60 percent said they had less money to spend on the holidays than the year before.

The overlap of candy corn and peppermint may feel a little odd, but financial experts say early planning can create room to compare prices, spread purchases across multiple paychecks, and avoid a steep credit card bill later.

“Earlier promotions give consumers more time to compare prices, spread out purchases, and avoid a large financial hit in December,” says Yanliu Huang, PhD, head of the Marketing Department at Drexel University’s LeBow College of Business.

That said, there is a downside. A longer shopping season can also mean more chances to spend impulsively, Huang says.

So how can you enjoy the holidays without undoing the financial progress you’ve made all year?

Take a lesson from Santa: make a list.

Begin with a total.

Before you start writing out gift ideas, decide how much you can reasonably spend on the holidays overall.

Huang suggests setting a total budget first, then listing everyone you plan to buy for, along with other seasonal costs, and assigning a spending limit to each. That matters because holiday expenses go far beyond gifts. Travel, food, parties, decorations, and other seasonal costs can quickly compete for the same money.

John Walters, CFP, Senior Investment Advisor and Wealth Strategist at Bryn Mawr Trust, says planning for those expenses well in advance gives shoppers an edge.

“Every month isn’t really created equal,” Walters says. “Some months are going to put more pressure on us than others, and the holidays are certainly going to be one of those more expensive months.”

Rather than treating holiday spending as an unexpected shock, Walters recommends preparing for the higher-cost season and setting aside extra cash when possible. That can be especially important for anyone trying to pay down debt, since an overly aggressive repayment strategy can backfire if it leaves too little cash for seasonal costs.

Don’t pay off debt only to put it right back on the card.

Credit cards are expected to play a big role in holiday spending. According to a NerdWallet survey conducted by The Harris Poll, 74 percent of holiday shoppers expect to use a credit card for at least some purchases, while 19 percent expect to finish the season with card balances they can’t pay in full and on time.

It can feel responsible to send every extra dollar toward an existing credit card balance. But if that leaves you short on cash for expected holiday costs — or an unexpected repair — you may end up reaching for the card again.

“You really have to build up some additional cash savings before you start attacking your debt,” Walters notes.

That is why he recommends keeping a cash cushion alongside any debt-repayment plan, so the next expense does not immediately create new debt. Before the holidays, that may mean setting aside money specifically for gifts and other seasonal costs, and doing it as early as possible.

It may also make sense to temporarily scale back extra debt payments during a high-spending month instead of paying down a balance aggressively and then charging holiday purchases afterward.

The objective is not to abandon your debt plan. It is to keep it from turning into a revolving door.

Be skeptical of anything labeled a bargain.

A 40 percent discount sounds impressive until you realize you spent $60 on something you never meant to buy.

Limited-time sales and early access promotions can create a sense of urgency that pushes shoppers away from careful decision-making, Huang says. Instead of asking whether you need the item, you may start focusing on how much you think you are saving by buying it.

Her quick test is simple: Would you still want it if it were not marked down?

“A discount is not necessarily a saving if it leads you to spend money you hadn’t intended to spend,” she says.

Before you check out, she suggests asking three questions:

• Was this already on my list?
• Would I consider buying it without the promotion?
• Does it still fit within my budget?

Buying early only works if you keep track.

Spreading $1,000 over three months may be easier on monthly cash flow than spending it all at once in December. Spending $1,000 by November and then continuing to shop because more deals appear is a different story.

“The key difference is between spreading out planned spending and accumulating additional spending over time,” Huang notes.

That means tracking matters just as much as budgeting. A paper list, spreadsheet, or budgeting app can all work, as long as you keep it current as purchases happen.

Walters also recommends checking your accounts more often during the holiday season.

“Maybe if you’re somebody who checks your bank account once a month, during the holidays, check it once a week,” he says.

When transactions start piling up faster, checking every few days can help you catch overspending before it gets out of hand.

Give yourself permission to spend differently.

A strong holiday budget does not necessarily mean buying a cheaper version of everything. Sometimes it means rethinking what you need to buy at all.

That idea sits at the heart of countless Christmas movies, after all. The most meaningful parts of the season usually are not the ones that come with a price tag.

Walters says a thoughtful, low-cost gift can carry more meaning than an expensive one. He also points out that giving your time, helping with a holiday meal, or taking on another task can be just as valuable as adding another present under the tree.

In the end, the goal is not to strip the fun out of the season or the joy out of giving. It is to reach January without realizing that a few months of “good deals” created a new pile of debt and a lot of purchases no one really needed.

For more advice on budgeting, saving, and planning for financial goals, see our monthly series with WSFS Bank.

This piece is part of a multi-year editorial series sponsored by WSFS Bank and Bryn Mawr Trust.