How to financially prepare for the holiday season 

Figure out how much money you spent on the holidays last year by looking at your credit card and bank statements. Then, ask yourself a few questions to prepare for this year. Can you afford to spend that much on gifts, travel, decor, etc., again without taking on debt? 

How do you feel about having spent money on those things? If you don’t feel good about it, now is a good time to think about what you can do differently. 

Create a holiday spending fund by setting a budget. Write down how much you take home every month (after retirement contributions, taxes, debt payments, etc). Then write down how much you spend on necessities (rent, groceries, child care or other expenses you can’t give up). 

Subtract your necessities from your take-home pay, and you’re left with the number you’ll use for your “fun spending,” says accredited financial counselor Bethel Habte. In this case, some of that “fun spending” would go toward your holiday budget. 

Save money now to use for the holidays later. Not sure where that money will come from? Look at your discretionary spending and cut back in one place to save more. Maybe you don’t book the expensive weekend trip this fall. Or you do yoga at home with YouTube videos rather than going to workout classes. 

Identify what you’re going to do cheaper, later or not at all. When you get an invite to spend the holidays with a loved one across the country, or feel social pressure to buy a big gift, ask yourself: Is this in my budget? 

Remember, your budget won’t be the same as everyone else’s and that’s OK. “There are seasons for spending, seasons for saving,” says Jasmine Ramirez-Ibeabuchi, a licensed clinical social worker who focuses on money and mental health. “Be mindful of what season you might be in.”