A step-by-step guide to making a holiday budget

Ah, the holidays. It’s a time for seasonal cheer, catching up with family, and for some—financial panic!

If you recently looked at the calendar and realized gift-buying season is closer than you thought, don’t worry. We are here to help you organize your finances by making an effective budget. Follow these steps to avoid going into debt this season:

Step 1: List all of your expenses
Are you buying presents for everyone? Hosting a party? Attending a holiday concert or event? Write a list of everything you intend to spend money on (and how much each item costs). Then start to prioritize. You don’t have to cross anything off just yet, but make a mental note of which items are more important.

Step 2: Set a limit
Now it’s time to review your income and any money that you’ve set aside for holiday expenses. Your goal here is to figure out what you can afford without going into debt. If you have to dip into your savings, make sure to keep a cushion for any emergency costs that might come up.

Now you can decide once and for all which expenses are important, and which ones can be crossed off your list.

Step 3: Research seasonal sales
Sales go hand in hand with the holidays. This is when many retailers make a large portion of their annual revenue, so they want to attract as much business as possible.

How do you find the best deals? Sign up for email alerts and follow brands in social media. You will be the first to find out about those special seasonal sales. You should also pay attention to Black Friday and Cyber Monday promotions.

Step 4: Comparison shop
Unless you are searching for a super unique gift, your desired item is probably available from multiple retailers. Fortunately, the Internet makes comparison-shopping easy, especially during the holidays when every company is trying to compete for your business. Make sure you visit different websites and do some research to find the best deal.

Step 5: Consider going cash-only
The downside to shopping online is that it can be harder to track how much money you’re spending. And it’s even trickier during the holidays when you’re purchasing many items at once.

As an alternative, try using cash. You will know exactly how much money is leaving your wallet. Plus, if you like, this gives you the chance to shop in person and support local businesses.

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