The “ber” months are here – which means that Christmas is just a few months away.

Aside from keeping an eye for upcoming Christmas bazaars in your area, it’s also important that you start saving for the expected increase in your spending.

While employees can always use their bonuses and 13th month pay to cover for the holiday expenses, I think that it’s better to use that extra money to pay for debts or to buy an investment.

Moreover, for freelancers and business owners like me, we have the “unfortunate luck” of giving away Christmas bonuses instead of receiving them. Which makes it very important for us to really plan our finances for the approaching holidays.

While traditionally, freelance projects and business sales significantly grow during the holidays. One cannot solely rely on expected increase in sales and profit to cover for one’s holiday spending.

Which really brings us to the point of this article – to start saving for a “holiday fund”.

But how do you do it? Below are some very simple steps.

You know you’ve got your financial act together if you spend the same percentage of your income between Thanksgiving and New Year’s as you do between New Year’s and Thanksgiving.

- Jonathan Pond, American Financial Planner

List down the people you will give gifts to.
As early as now, have a list of people you’ll most likely give presents to. Be generous and include everyone you want. Once done, you can try to sort your list and group them according to their importance to you – which usually dictates the budget for their gifts.

Anticipate the parties and the gifts you’d have to bring.
Exchanging gifts is a common practice in Christmas parties. Count how many parties you’ll most likely attend that would require a gift – then estimate the probable required value for the present.

Make a budget for a gift to yourself.
Reward yourself for all the hard work you’ve been doing the whole year and make an achievable budget for your personal gift. It’s better if you already know what you want – that way, you can already start looking where you can buy it the cheapest.

Sum up everything and get the estimate of how much you’ll need to save.
Now that you know how much you’ll need for the holidays. Divide it by 16 and that’s how much you need to save each week to achieve your goal. Why 16? That’s the number of Saturdays left before Christmas starting from the first week of September 2009.

Here’s a sample worksheet that I made that shows you how you’ll holiday budget summary might look like:

In the example above, saving P500 a week seems achievable don’t you think? If not, then you should adjust your budget accordingly until it becomes acceptable to you.

Of course this is just a simplified example, there are other expenses not considered like food for potluck parties, Christmas home decors and possible increase in electric and telephone bills. If you can, do include them in your budget plan.

The main point of this exercise is to really help you have a clear view of your expected spending this coming holiday season. The earlier you know, the more time you’ll have to plan financially.

And more importantly, learn to commit to your budget and holiday spending plan – isn’t it time for you to start this New Year without debts and with extra money in your pocket?

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