Thanksgiving is just weeks away – meaning your annual ritual will soon begin of buying gifts, booking travel and planning meals. Every invitation will become an expense.

Even though the holidays arrive at the same time every year, their arrival surprises people. So, stop blaming the holidays. You overspend because you don’t have a plan.

Because the holidays are a predictable expense, you can prepare. Decide now how much you can afford to spend so you can control where your money goes once the holidays arrive.

Decide What You Will Spend

Begin by listing everyone on your gift list. Beside each name, write how much you will spend on each person. This is important: don’t list what you will buy but how much you will spend on them.

The distinction matters. If you select the gift first, you will mentally force yourself to spend whatever it costs – even if the cost is more than you expected. So, decide what you can afford first, then find a gift within that amount. And don’t forget the card, gift wrapping, taxes and shipping charges!

Do the same with every other holiday expense: travel, food, entertaining, decorations, parties, events, charitable giving and other seasonal expenses. Add everything together before you start shopping. 

That number is your limit.

If the total is more than you want to spend, cut it. Reduce the list. Cut the amount you will spend on individual gifts. Eliminate the least important expenses.

Make all these decisions before you start spending and you’ll avoid spending too much.

Your Emergency Fund Is Not a Holiday Fund

Resist the temptation to dip into your emergency fund. It’s for use to pay for unexpected expenses – and the holidays don’t qualify. If you dip into your emergency fund for gifts, that money won’t be there if a real emergency occurs.

Start Saving for Next Year

When this holiday season ends, use what you spent to set your plan for next year. And start saving for the holidays in January, and save a bit each month. Turn an annually recurring expense into a monthly savings habit.

Learn more: Explore PFI’s Smart Credit Card Habits for more on managing holiday spending and credit cards.