The holidays are coming, which means now is the best time to start making your holiday budget. Budgeting reduces your risk of falling into debt, which is a lot easier than you’d think.

Approximately 44% of shoppers rack up $1,000 in holiday debt every year. To help you avoid that kind of financial nightmare, here are a few simple tips you can use to keep from overspending.

Create a list of holiday expenses

It’s all too easy to overspend if you’re not entirely sure what you’ll be spending money on. Many people wonder why their money is so tight at the end of the year because they only think about the money they’re spending on gifts.

That being said, make a list of all of your expected holiday expenses. These expenses include gifts, wrapping paper, cards, gift exchanges, photos, charitable donations, and travel expenses. Making a list gives you an outline of the things you’ll need to pay for aside from gifts for your friends and family.

Determine your spending limit

Determine how much money you have available to cover your holiday expenses. Only use the money you’ve set aside for the season. Keep your eyes away from your credit card.

Paying for holiday gifts with a credit card can cause you to quickly go over budget. And when you’re over budget without a plan to pay off your expenses, you can end up in financial trouble.

Make a shopping list and communicate your kids’ lists with others

Divide your budget accordingly between each of your spending categories. From there, make a list of your holiday shopping. It’s best to have one or two ideas for each person within your price range.

If you have kids, make sure that everyone in your family is one the same page when it comes to gifts. For instance, if you’re among the 50% of married couples that have ended in divorce, it may be in your best interest to have family members buy your child one toy and have the rest be things they need like clothes and shoes.

It can be challenging to stay in your budget during the holiday season. You might budget for gifts but forget about travel expenses or the need to buy wrapping paper and food.

By following the tips above, you can keep yourself on the ball this holiday season and keep your holiday budget under wraps without falling into debt.

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