The holidays are supposed to be a time to relax and celebrate with family and friends. Images of decorating a tree, enjoying hot chocolate by the fireplace, and gathering around the table for turkey come to mind. 

Unfortunately, this time of year can be anything but relaxing for many people. In fact, it can be pretty stressful. Finding time to shop, navigating crowds, and dealing with the financial pressure of buying gifts for your nearest and dearest can put a drain on the holiday magic — not to mention your bank account. 

The truth is, even the most money-savvy folks need a financial plan for dealing with the season. Here are some ideas to help keep spending in check so things stay merry and bright. 

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Build Christmas Into Your Monthly Budget

You know those people who earn modest incomes but always seem to have their finances in order? If you ask them their secret, I bet their reply will involve the word budget. 

Having and sticking to a plan for your money is the best way to ensure you address all your financial priorities. And these days, there is no shortage of budget templates available to help you tackle the task. It doesn’t matter if you use a pen and paper, learn how to make a budget in Excel, or opt for a budgeting app, as long as you make a plan for your money and track your spending relative to that plan. 

So what goes into a budget? It isn’t enough to include just your regular bills like mortgage or rent, utilities, and groceries. It isn’t even enough to add in your savings goals (although that’s a great start). To really master budgeting, you need to think ahead to the expenses you expect to incur and plan for them.

You can see where I’m going with this. If you know you typically spend $600 on Christmas gifts, you can start budgeting for it in January. I know that sounds like overkill, but think about it: $600 over 12 months is only $50 per month. What’s easier: putting aside $50 every month or coming up with $600 in December? 

Set a Gift-Giving Budget

If you’re building Christmas into your budget, that means you have a plan for how much you’ll spend. Sticking to that plan when the season rolls around can be a different matter. 

It’s important to set a realistic gift-giving budget and then stick to it. If you decide you can afford to spend $600 on Christmas, then that $600 has to cover all your gifts, no exceptions. That might mean opting for less expensive presents or paring down your list. Enter that amount into your budget template and hold firm.

Need ideas that don’t cost much? Homemade baked goods! You can whip up a few dozen cookies for about $10 and gift them to people. Homemade gifts are personal and usually inexpensive to make.

Put a Cap on Per-Person Spending

A good way to reinforce your gift budget is to set a maximum amount you’re comfortable spending on any one person. This can be in general or specific to your relationships. 

For example, you might say that $50 is your max for anyone. Or you might decide that you’re comfortable spending $50 on your immediate family, but prefer to keep gifts for extended family and friends at $25 or less. 

Try Secret Santa

A great idea that I see is secret Santa. You each draw a name and buy a gift for only that person. Then you plan a night when you all get together to exchange gifts and try to guess the identity of your secret Santa. 

It adds a fun, mysterious element to the gift exchange and saves you a ton of money because you buy only one gift. I’ve seen professional teams and even large extended families do this, too. It can really work in any group!

Pay Your Credit Cards in Full or Don’t Use Them at All

Credit cards are a great way to earn rewards on your regular purchases, but they can be dangerous for some. There are basically three rules to follow when using credit cards:

• Only buy what you know you can afford
• Always pay your bill in full by the statement due date to avoid interest charges
• Ensure you use the card enough to justify the annual fee, if applicable

Credit card issuers love the holiday season because it’s when cardholders are most likely to violate the first two rules. If you don’t budget for Christmas, you’re likely to overspend, which is much easier to do with a credit card than with cash. And if you overspend, you may not be able to pay your bill in full by the due date, meaning you’ll incur interest charges. Credit card interest rates are notoriously high and can be difficult to recover from.

Even if you haven’t overspent and can pay your bill, you’re more likely to forget to make a payment during the busy holiday season. So if you’re using plastic to pay for Christmas gifts, make extra sure to pay your bill in full and on time. Set a calendar reminder so you don’t forget. Or better yet, automate the payment. And if you tend to overspend when using credit cards, it’s best to forego them altogether. 

Capitalize on Discount Codes, Cash Back, and Other Deals

Sales abound during the holidays, and whether you’re shopping online or in-store, there are deals to be had. 

Some people are avid couponers and save an incredible amount of money that way. I tip my hat to them, but I don’t feel like that’s something I have time to get into. However, when shopping online, I always check for cash back offers and discount codes before heading to the checkout. Browser extensions like Rakuten and Honey take the work out of doing this and help ensure you never miss a deal. 

A real life example? This week I got a check for $25 from Rakuten for cash back I earned from shopping through its online portal this quarter. That’ll cover a Christmas gift! 

Final Thoughts

The holidays are an expensive time of year, and it’s easy to let things get out of control if you’re not careful. It’s important to set limits for your spending so that a joyful occasion doesn’t become a stressful one. I hope these tips help you keep things in check. Happy Holidays!

This timely and informative article was contributed to Leisure Freak by Sandra Parsons

Sandra Parsons is a freelance writer for Club Thrifty, a website dedicated to helping people dream big, spend less, and travel more.