It's Time to Start Saving for Christmas

If there's one thing I hate, it's Christmas creep. You know, when stores start putting out Christmas merchandise months in advance of the holiday, encouraging consumers to start spending asap.

When I visited my bank yesterday, I saw a sign encouraging customers to sign up for a Christmas savings account. Now that's the kind of Christmas creep I like to see!

Now is a good time to start getting ready for the Christmas, it's only four months away. The famous Black Friday is only three months away. If you want to avoid holiday debt that lasts until next year, start a savings plan right away. This is how I set my holiday spending budget:

1. Decide who I'm going to buy for
2. Decide how much I'm going to spend on them
3. Add it up
4. Divide by the number of paychecks left until ~December 15
5. Open a special savings account and save that amount each paycheck

You can also do it the opposite way, working backward from what you can afford to save.

1. How much can you afford to save each paycheck. Hint: discretionary income
2. Multiply by the number of paychecks you have until ~December 15. That's your budget
3. Write down the names of your gift recipients
4. Decide how much you're going to spend on each (don't go over your budget)
5. Open a special savings account and save that amount each paycheck

Don't forget to allocate for gift wrap, decorations, food, cards, and travel expenses if you'll have any.

Erin Hoffstetlar, our Guide to Frugal Living, has a holiday budget worksheet you can print and fill in with your budget (you'll need adobe reader).

As you begin preparing for the holiday season, here are some things to think about.

• Surprise Holiday Debt
• Regifting to Avoid Debt
• 8 Tips to Avoid Holiday Debt

P.S. If you're still paying off your credit card bills from last year, here are some Tips to Shed Your Holiday Debt.