Did the holidays break your budget?

All the expenses of Thanksgiving, Christmas and New Year's combined are enough to make me pass out if I was not properly prepared. The food and gifts alone can consume an outrageous portion of my budget,  not to mention all the Black Friday and after-Christmas sales that somehow convince me to part with my hard-earned cash. Of course, the banking industry also takes advantage of this season by pushing Holiday loans at attractively low interest rates. Even in hard economic times, consumers still want to spend around Christmas and these loans allow them access to hundreds and even thousands of dollars to do so.

I personally believe that you should never go into debt for the Holidays. It just doesn't make any fiscal sense. If you find yourself having to financially recover throughout the next six months because of the amount you spent on gifts, decorations, food, etc., then you really need to rethink the amounts you have allocated for each category. Determine the comfortable price range you can afford when choosing gifts for friends and family. Retailers will try to convince us we need to buy the latest and greatest toys and gadgets, but a homemade gift can go over just as well. And it was made from the heart, not some lead-induced factory in China.

Let's avoid spending ourselves into oblivion by preparing for the holidays right now. Yes, I said right now. Determine how much you spent on gifts and other items during the 2010 Christmas season. I am sure you saved all your receipts, right? :) Divide that amount by 45 or so weeks and the remaining number will be the exact amount you need to save every week from now until the beginning of the Christmas season.

You can do this one of two ways......

I personally set aside my specified amount as a separate column in my Savings Account Excel Spreadsheet. (Call me obsessively organized, I don't care...:) ) When the time comes to start buying gifts and food, I can either pull the cash out of my account or transfer the money over to my checking.

I also know some people really like and prefer the cash/envelope system. Physically setting aside cash every week in an envelope is a tangible way to see your stash grow, and helps keep you from spending it on other items.

Either way, when all the hub-bub and Christmas busyness begins and money starts becoming tight, you can just relax. Your cash will already be accessible and available. As Americans, we constantly make the holidays the most stressful time of year, instead of the most wonderful. But early preparation can help you focus on the things that matter most - your family, and the true meaning of the season.