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Jennifer Hunter, Ph.D., University of Kentucky Cooperative Extension Service

When the leaves continue to fall and the nightly temperature drops, we know that the holiday season will soon be upon us. This season is often a special time for families as loved ones gather near and far to celebrate. However, holiday expenses can sometimes threaten the joy that we experience during this season. Getting an early start will reduce holiday stress and your after-holiday bills, often known as the holiday financial hangover.

Before the holiday season moves into high gear, take the time to get prepared. Review your

Photo of shoppers on street with holiday decorations

Grafton Street Christmas Shopping Dublin by Ben and Kaz Askins

current financial situation and determine a holiday spending limit that works for your family budget. To make certain you are not tempted to increase that limit as the season progresses, develop a budget for gift-giving, food, travel and entertainment expenses. Additional expenses that are often left out of a holiday budget include gasoline, babysitting fees, and eating out more often.

As you work on the budget, start by making a list of everyone you plan to give a gift, including children, loved ones, teachers, babysitters, hair stylists, etc. Identify a realistic spending limit and a possible gift for each person on your list. It is important that you do not feel pressured to give anyone a gift. If your finances are right this year, consider a hand-written note expressing thanks or appreciation. Continue to work your way through your holiday budget by estimating other anticipated expenses. If you have receipts or credit card statements from last year, you may be able to use them as a guide in developing a realistic estimate for travel, entertainment, and food expenses.

As you are preparing for your budget for the upcoming holidays, think about how you will pay for holiday shopping and expenses. You are less likely to overspend if you pay with cash, as opposed to using a credit card. If you are using cash, once all of your cash is gone, you are finished with your holiday shopping. Another option to consider is that many stores now offer store layaway plans. If you decide to use store layaway options, be certain to check their return policy and keep track of all payments.

Plan holiday shopping trips ahead of time, review store ads, and know exactly who and what you are shopping for prior to entering the store. Impromptu shopping trips and wandering around a store looking for gift ideas can lead to impulsive purchases, which were not part of your original budget. Do your window-shopping at home online, or with catalogs so that you know exactly what you want when you are at the store. Finally, remember that holiday sales can be tempting, so once you are in the store, stick with your original budget.

Contact Jennifer at [email protected]