We know, it’s way too early to start thinking about the holidays. But planning your holiday budget now can save you from credit card debt later.

The most wonderful time of the year is months away, still but a distant dream of eggnog, ugly sweater parties, and caroling. It’s hard (and obnoxious) to even start thinking about it as we bask in the season of swimsuits, vacations, and sunburns. But despite that, there’s one aspect of the holiday season that we can and should all start thinking about today: money.

While the holiday season is one of the most festive we celebrate, it’s also one of the priciest. And according to a BMO Harris Bank survey, it’s also a season of regretful spending for one in three Americans. My husband and I (OK, mostly just me) get so zoned in on the festivities that the very idea of budgeting seems almost Scrooge-like. After all, no one wants to be accused of ruining Christmas. Bah humbug.

But I’m getting ahead of myself. Because it’s July. Right? Right?! Wrong. My years of holiday overspending have taught me that now is indeed the precise time to talk about the holidays. Don’t worry; I’m not about to advocate pulling out the Christmas tree so the holiday spirit can be felt year-round. That can all wait until after Labor Day (kidding). But the part I mentioned earlier, the spending aspects of the holidays? From gifts, parties, stocking stuffers, baking, and feasting, the costs of the holiday season can make or break an entire year of otherwise solid budgeting.

So it’s Christmas in July, from a budget perspective, that is! Here are a few spending tactics to figure out today in order to have a financially successful holiday come December.

Budget Every Single Holiday Expense

At the beginning of the year, my husband and I map out all our gift expenses for the next 12 months, including our Christmas gifts. We plan out how much we can spend for everyone on our list—each other, our kids, siblings, parents, and friends. It’s not something that has to be done at the beginning of the year, but this planning should happen months in advance. (Like, say, in July.) By knowing our spending limits for each person, we can start planning gifts in advance and ensure we can actually afford the gifts we’re buying.

On top of budgeting gifts, Johnny and I also like to plan out all other holiday expenses, too. I, for one, am the Martha Stewart of wrapping paper, gift tags, and ribbon. Seeing pretty gifts under our tree just takes the cake, so we budget an amount just for that. We also tend to spend extra on food, thanks to all the obligatory Christmas baking, so we plan an extra special food budget just for December. By preparing months in advance, we can start saving money and curb our spending well before the holiday season rolls along. That way when December finally hits, I can buy gift wrap to my heart’s content without feeling any financial guilt.

Spread Out the Spending

Another reason we like to start Christmas in July is that it softens the holiday financial blow significantly. Rather than buying all of our gifts in November and December, we buy items here and there throughout the year (mostly in the latter half) and avoid having a spending explosion come the holidays.

Most of us prefer to do our holiday spending during the actual holidays. That sentiment jives with the stats. According to a CardHub study, Americans put $45.5 billion on credit cards in the last quarter of 2014. That figure is nearly double any other quarter of the year. Johnny and I know that by holding off on all of our Christmas gift shopping until the end of the year, we’re just a hypothetical trip away to the mechanic or the emergency room from digging a hole with our credit cards. By setting aside money and spending it throughout the year, we better protect ourselves from the what-can-go-wrong-will-go-wrong scenarios during the holidays.

Start Looking Now for Gifts

It seems pretty weird, but by embracing the Christmas spending mindset now, Johnny and I ensure we give the very best and most thoughtful gifts to everyone on our list. Instead of waiting for the last-second strike of inspiration to strike and praying that a store has the item in stock, we’ve got months to let those perfect gift ideas marinate. And perhaps more importantly, it also means we can start looking for deals now.

Johnny is the master bargain hunter when it comes to super premature holiday shopping deals. When he knows of a big-ticket item I’ve got my eye on, he’ll visit a few of his favorite deal sites, turn on price alerts to notify him when a certain item has reached a given sale price, and patiently wait for his inanimate prey. From a KitchenAid to a DSLR camera, Johnny has scored some amazing deals, saving us thousands of dollars in the process by buying big-ticket items months before the holiday season. This also means he’s outdone me in gifts almost every year of our marriage. (Thanks, honey! This is such an awesome gift. Will you excuse me for a second while I go burn the sweater I got you?)

By following these guidelines, Johnny and I are able to enjoy a mostly regret-free holiday and can focus our time on the things that really matter, like watching Elf 20 times. Happy holiday planning!


Joanna and Johnny are the writing duo behind Our Freaking Budgeta personal finance blog documenting the joys, pains, and realities of living on a budget. From the basics of saving and getting out of debt, to venturing into the wild world of basic investing, they document their journey through young adulthood while exploring their love-hate relationship with their “freaking budget.”

Any third-party resources or websites referenced above are not under our control. We cannot guarantee and are not responsible for the accuracy of the resources, websites, or any products or services available through such resources or websites.

While we hope the information in these materials are useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need advice geared to your personal financial situation, you are encouraged to schedule time with a financial planner.

Let's take action, Grownup.

Check out our courses to start taking action on your goals any time.

Take a course

Let's stay in touch, Grownup.