Are you thriving or barely surviving the holidays when it comes to finances?

As we finish out this Christmas season and look toward the new year, let’s consider a few questions in our planning when it comes to holiday spending for the months ahead.

How much does it really take to get through the holidays for you and your family? Are you adequately prepared once the winter holidays roll around? These questions, and others similar to them, run through my thoughts every Christmas season:

How much do I need to save for Christmastime gifts and travel?
How much money should I spend for each person on my list?
How much quantity-wise do I need to give for those on my list?
How much is enough? And how much is too much?

When I was younger, single, and trying to get through college and grad. school, money was tight! So when holiday season began, I knew there needed to be a plan in place if I wanted to buy gifts for family and friends as well as travel to see them. This meant planning ahead with funds was a necessity! I found that staying ahead of the game by both budgeting and saving toward that budget was was key.

The first thing I did was talk with someone at the bank I used. With each paycheck—beginning in January—they would hold out the portion I requested into a separate savings account. This money would accumulate and later be used for Christmas gifts and travel.

In order to know the amount I needed to save all year, I looked at real numbers such as the average cost of a plane ticket, plus the number of gifts I really needed to purchase (for parents, sibling, special friend, etc..), and then what I wanted to spend for each of those.

You can do this, too, with your holiday plans!

Once you have these numbers in mind, add them up and divide by eleven [months] since you’ll need to purchase these items before Christmastime (or the end of the year). Once you know how much to save each month, divide that amount in half so you can pull that amount from each paycheck—that is, if you get paid twice/month.

Obviously, for holiday travel you’ll need to have a good idea about which mode of transportation you plan to use. Planes, trains, and automobiles all have varying price tags which will certainly affect your budgeting efforts!

For gifts, it’s also good to have a price point in mind. If you’re in a lower salary bracket, then set a lesser budget for gifts. Or, decide a maximum amount for family members versus those for friends, coworkers, or “other” gift opportunities (such as white elephant presents for social parties).

Once you’ve figured these kinds of numbers and spread the total out across the year, you’re ready to start saving this money, knowing you’ll be ready by Christmastime for holiday fun!