It’s beginning to look a lot like Christmas!
As much as we complain when stores deck the halls while it’s still beach season, it turns out that they might actually be on to something.
The best time to start plotting out your holiday spending is now. Because the more you plan ahead, the less likely you are to overdo it, and the more likely you are to still have some jingle in your wallet when 2016 rolls around.
Don’t believe us? A 2014 American Research Group survey found that early-bird holiday shoppers shell out almost $400 less than those who put it off until November.
So don’t be a last-second Santa — get moving on these eight ahead-of-the-game holiday budgeting, planning and shopping to-dos.
Head Start To-Do No. 1: Hash Out Your Holiday Budget
Just as with any other financial goal, the first step to getting financially ahead for the holiday season is to nail down a budget.
One of the best ways to do that, said John Neyland, a financial adviser and president of JCN Financial & Tax Advisory Group in Baton Rouge, La., is to add up last year’s holiday receipts and credit card charges for a clear picture of what you spent.
You can then use those numbers as the basis for creating a 2015 holiday budget worksheet, where you’ll plug in realistic estimates for every holiday spending category — from entertaining and gifts to travel and charitable donations.
Once you’ve landed on the right figures, devise a specific savings strategy that you’ll execute over the next six months to cover those holiday costs, such as brown-bagging your lunch a couple days a week and banking the difference.
Head Start To-Do No. 2: Open a Holiday Savings Account
Even if you’re not quite ready to start your holiday shopping, it’s never too early to start your holiday saving. And while it might seem easier to simply funnel your holiday money into a catchall savings account that also includes your emergency cash, Neyland advises against it.
“Your emergency fund should be used for emergencies only — I really can’t stress enough how vital it is to keep that separate,” he said. “Opening different accounts for each savings goal is a good way to keep from dipping into funds earmarked for a different purpose.”
When shopping for a place to park your holiday cash, Neyland recommends looking at online banks, which typically offer favorable interest rates — as well as provide an extra layer of protection against the temptation to withdraw the funds for other things.
“The easiest way to save money is to never see it in the first place, which is why you should also consider setting up an automatic transfer from your paycheck to your holiday savings account,” Neyland added. “The good news is that, by starting in July, you’ll be able to take out a much smaller amount each pay period than if you wait until November [to set up an account].”
Head Start To-Do No. 3: Plot Out a Detailed Holiday Spending Plan
With a first draft of your holiday budget in hand, dig deeper by pinpointing exactly how you’ll spend money within each category to ensure your numbers are accurate.
Is it your turn to host the annual cookie party? Then be sure to factor enough money into your entertainment budget to cover baking supplies and decorations. Do you need to buy plane tickets to visit family for Thanksgiving and Christmas? Bake that into the “holiday travel” section on your worksheet.
“Creating a plan well before the holidays not only keeps you organized, but it allows you to take advantage of deals throughout the year, alleviating overspending when you’re pressured at the last minute,” Neyland said.
And don’t forget to put advance thought into whose stockings you’ll be stuffing.
“Knowing who you want to buy gifts for — and how much you’ll be spending on each person — is a great way to stay organized,” said consumer savings expert Andrea Woroch. “This way, you can start collecting a gift a month or whenever you come across a sale or coupon, so you don’t double up or waste money.”
Head Start To-Do No. 4: Canvas Hidden Costs
Take some time to think about the sneaky expenses you’ve failed to plan for in past years — such as a tip for your doorman — and revise your spreadsheet as needed.
The beauty of this exercise is that you might find opportunities to save, too. “Some holiday expenses, like travel, might be non-negotiable, but certain areas of your budget could have more wiggle room,” Neyland pointed out.
Case in point: Do you usually end up paying rush shipping fees or add on an extra $5 for in-store gift wrapping? Acknowledging these costs now can help you avoid them and keep them from busting your budget at the last minute.
Head Start To-Do No. 5: Hit Pause on One Habitual Expense
Let’s be real: There’s always room to scale back your budget a bit more.
Whether it’s your tendency to toss a celebrity magazine into your cart at the supermarket checkout or to order several appetizers with dinner, choose one unnecessary expense you can live without, and funnel the money saved into your holiday account.
“If it makes it easier to eliminate a certain luxury, remind yourself that this exercise is temporary — although you might find you don’t miss it as much as you thought you would,” Woroch said.
Head Start To-Do No. 6: Suss Out Seasonal Sales
Since you’re getting an early start to your holiday shopping this year, you’ll actually be able to take advantage of seasonal sales. Want to buy Junior a new bike for Hanukkah? Start looking in January. Need some new kitchen gadgets in time for holiday hosting? They typically go on sale in October.
“Back-to-school sales are also a great time to find deals on winter wear items that will be perfect for holiday gifts, like boots or cashmere sweaters,” said Woroch, who also recommends following retailers’ social media accounts to source additional discounts.
Another shopping secret? You can nab gift cards at up to 90 percent off for such stores as Target, Home Depot, and GameStop on a site like GiftCardGranny.
“Gift cards are great because you can use them as presents or stocking stuffers, or as a way to save on your own holiday expenses,” Woroch said. “For eight years straight, they’ve been the most requested gift item.”
Head Start To-Do No. 7: Redeem Those Rewards
Between new summer duds for the family and upcoming travel reservations, you’ve probably racked up quite a few credit card points that you can put to good use for your holiday-centric spending.
“Eventually, points expire,” Woroch explained, citing a well-known report that found at least $16 billion worth of rewards go unredeemed every year. “Banking them for the holidays is a great way to save on gifts and travel — and avoid debt.”
But before redeeming, do some research on your creditor’s website to ensure you’re not missing out on any valuable incentives.
For instance, Woroch said, some cards offer big bonuses — like 25 percent extra cash back — to cardholders who don’t redeem their rewards until they’ve accrued $300.
And, of course, remember to only charge what you can pay off in full, lest you end up triggering interest charges that will cancel out those rewards benefits.
Head Start To-Do No. 8: Track Your To-Do List
There’s just one downside to all this proactive holiday planning: If you’re not careful, you’re likely to forget what you’ve purchased and buy it twice, which is why organization is key.
Lisa Krecklow, 48, a medical device sales recruiter in Portland, Ore., keeps her spending in check with the Better Christmas List app. It allows her to create groups of people she’s exchanging presents with, juxtaposed with a list of gift ideas and her budget. She can also track each gift’s status, like whether it’s been purchased, wrapped and even shipped.
“Having that information at my fingertips ensures that I choose gifts that fit my budget and nothing falls through the cracks,” Krecklow said. “As an added bonus, the gifts I don’t buy can stay on the list as ideas for next year.”
Woroch herself likes OneReceipt, an app that digitizes paper receipts on your phone and categorizes them, so they’re easy to find when making returns and exchanges or logging your spending.
“You can often request that a retailer email your receipt, and then create a separate folder in your account for all your holiday purchases,” Woroch says. “This will help you track your spending, gift purchases and even charitable donations — and make it simple to access a receipt when you need it.”
Keep reading: 7 Shopping Apps to Save Money on Holiday Gifts
While it takes some initial effort to stay organized, your reward will come in December — when you’re sipping eggnog by the fire and others are duking it out at the mall.