Get your budget in order before the holiday season kicks off

Summer is coming to a close, and as Fall approaches it means the holidays are right around the corner. Walk into any store, and you'll see aisles and aisles of gift ideas. And while it seems a bit odd to look through holiday decor while wearing shorts and flip flops, those sellers may be on to something. Sure, they're looking out for their bottom line. But early shopping is also a way to look after your own. 

Holiday spending can be a very stressful time of year—especially when living costs are already high for many. So getting a head start on holiday budget planning could provide some much-needed relief.

First, set up a free budgeting app to help you track your spending and saving. Here are our tips for organizing your finances and getting the most of the holidays without breaking the bank. 

Review current debt

Make a list of your credit card balances and other debts. Jot down the balance, the required payment, and the interest rate. Information is power. It lets you make informed choices and track your progress.

Create a realistic budget

The goal is to enter the new year without any new debt. Sound tricky? It's not—as long as you have a solid plan in place. 

Prioritize paying down old debt, even as you're building a holiday budget. Let's say your take-home pay is $5,000 monthly and your bills amount to $4,000. That leaves $1,000. 

Now, if you're making an extra $500 payment each month toward a specific debt, keep it up (you're doing great!). And if you’re not, consider starting now to pay down debt before the holidays hit. That leaves you with $500. Put that $500 toward your holiday budget to cover expenses such as:

• Gifts

• Decor

• Entertaining

• Food

• Travel

If you put that money away each month from August to December, you'll have $2,500 in total to spend. 

Make a list of holiday expenses

List each expense you expect to encounter as the holidays approach, and decide now what your limits will be. For example, you might budget $200 for a holiday dinner or $400 for gifts for the kids. Each item on your list should have a budgeted amount next to it. Once you total up the list, the total should be less than the amount you're putting away for the holidays.

If possible, keep the list with you. You'll need to access it many times before the season is over. Make it a note on your phone. If your budgeting app allows you to create custom categories, list the items and budgets there.

Save 

No matter how much or how little you choose to contribute to your holiday fund each month, prioritize saving. Avoid mixing your holiday money with the funds you use to cover everyday expenses. Create a separate account that’s just for your holiday expenses. 

Many online savings accounts have no monthly maintenance fee and can connect to your main checking account for easy electronic transfers. If there are one or two extra steps you need to take to access that money, you might be less likely to dip into it for other expenses.

If you sometimes forget to transfer money from checking to savings, set up an auto-transfer with your bank and let them know what day(s) of the month you would like transfers to be made. The set-it-and-forget-it approach takes the hassle off your plate.

Scoop up deals and discounts

Let's say it's October, and, according to your list, you plan on buying a remote-controlled fire truck for your nephew. You've budgeted $35. However, you're out shopping one day and run across the perfect remote-controlled fire truck on sale for $25. Scoop that deal up. Some of the best buys are those you never expected to find. 

Once you've made a purchase, there are several things you're going to need to do:

1. Mark the gift off the list. You're done shopping for your nephew and can move on to another gift recipient.

2. If you paid for the firetruck using the money you had on you or with your debit card, withdraw those funds from your holiday account and pay yourself (or your bank account) back. 

3. Reduce the amount of money you have available. For example, if your overall budget is $2,500 and you spend $25, note the purchase and reduce your available budget to $2,475. 

Insider tip: There's a lot going on around the holidays, and it's easy to forget what you purchased. As you mark your nephew off the list, note what you bought him so it's easier to remember who gets what. 

Related: 5 ways to save on back-to-school shopping

Monitor your spending

It's natural to get into the holiday spirit and nearly as natural to overspend. As long as you keep careful track and always know how much money you have available, you have a better shot of sticking with your original budget. Sticking to your budget could leave you with a big sense of satisfaction when January rolls around and you notice that you’re not facing debt for the season that just passed.

The holidays can be a beautiful time of year. This year, you can make it even a little more beautiful by deciding in advance how much you'll spend, who you'll buy for, and how far you'd like your holiday budget to stretch.