The following column is the opinion and analysis of the writer, Katharina Buczek.

Every year, the Holiday season sneaks up on us way faster than we anticipate. Right now, we’re obsessed with pumpkins. Soon, we are going to be untangling Christmas lights and searching for last year’s wrapping paper.

But here’s the big question: is your bank account ready for all of the festivities? If you just felt a pang of stress (perhaps following some summer overspending), don’t worry– you’re not alone. And the good news is that there’s still plenty of time to get your finances in shape before holiday chaos ensues.

The Earlier, The Better

Nobody wants to be checking their bank balance with anxiety or a sense of impending doom come December. But lucky for us, it’s never too early to start budgeting for the holidays.

In fact, planning a few months ahead can be a total game-changer. All you need is a pen and paper– or an Excel spreadsheet– and some willpower.

First, Identify What’s Really Important

Holidays can be about a lot of different things depending on the person. You may value buying the best gifts or hanging up gorgeous decorations. Others might enjoy going out to fancy dinners with friends or even taking an annual ski trip.

But, for the sake of your budget, let’s keep it realistic: what truly makes your holiday season special?

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To get to the bottom of this, make a list of “must-haves” versus “nice-to-haves.” This will serve as your guide as you begin to divvy up your budget.

Start With What You Have

And before you start creating gift lists or booking any travel plans, take a moment to assess your current Financial Situation.

When it comes to budgeting effectively, the key is being brutally honest with yourself. Figure out how much you can realistically allocate for holiday spending without dipping into your essentials or going into debt.

It’s easy to see the holidays through rose-colored glasses. But, when it comes to protecting your financial situation, it’s not about going big– it’s about being smart.

Create A Budget For Every Category

Now that you’ve got your priorities and your financial situation in mind break down your budget into different categories.

These categories might include presents, decorations, dining out, holiday-related activities– like ice skating or skiing– traveling, and even those sneaky additional costs, such as wrapping paper and holiday cards.

Once you’ve narrowed down your spending verticals, you can give each category a spending limit.

Keep Yourself On Track

Now, arguably, the easiest part of budgeting is actually setting the budget. But sticking to it? That’s the real tricky part.

To successfully do this, you will have to keep tabs on your spending as you go.

There are plenty of ways to do this– whether you go the old-school route and track purchases in a notebook, use a budgeting app, or even keep lists in your phone’s Notes app.

Just find a method that is convenient and works for your lifestyle. This will make it much easier to remain consistent.

Plus, as you move along, you will be able to make adjustments if you realize you’ve underestimated some costs (because, hey, it happens).

Creative Ways To Save

If you find that your eyes are a bit bigger than your budget, don’t fret.

You can always consider creative solutions like DIY gifts, hosting a potluck instead of a lavish dinner, or even starting a gift exchange among friends and family to reduce the number of gifts you have to buy.

Don’t Forget About Doing A Post-Holiday Review

Once the holidays have passed and the new year rolls in, it can be easy to just take down decorations and move on with your life.

However, looking back and recognizing areas for improvement is the best way to prepare for your future.

So, after the dust settles, take some time to review your spending. Did you go over budget? Or did you nail it?

Then, you can use this reflection as a blueprint for next year’s holiday season.

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