By Julie Jaggernath

Do you ever wonder how you can manage big, unexpected expenses like Christmas better so that you don’t need help with debt later on? Always feeling like you’re behind with your debts, that you have financial problems, or playing catch up with maxed out credit cards, is stressful. However, July is a great time to turn your money management around; start planning for Christmas now because it’s an expense you can easily predict – you know for sure that it’s coming.

Recognize That There’s Always an Expense to Pay For and Plan Ahead

If you think that there’s always something to pay for, you’re right. Whether it’s one-off expenses like a graduation, ongoing vehicle maintenance and repair bills, or seasonal expenses like Christmas and the holidays, planning ahead to the best of your ability will help you manage these expenses and avoid or overcome financial problems.

Motivate Yourself and Become Better with Money

Rather than telling yourself that you should be better with your money, use your feelings of frustration to motivate yourself. Think about how you felt this past January when the Christmas bills came in, and how you want to feel next January. Consider how you’d feel if you had the money to pay for unexpected bills when they occur. Write down your motivation for planning ahead, post it where you’ll see it and think about it often. Keep focused on your goal and on taking steps to make it happen.

Determine How Much to Save from Each Pay Cheque Based on the Overall Cost

In order to bump the balance in your savings account up to a level that will let you pay for large or unexpected expenses, you need to have a plan based on how much you can save from each pay cheque.

Decide how much you can afford to spend on Christmas and the whole holiday and winter season by looking back at last year’s expenses. Then, make a list of what you want to do this year and tally how much it will cost.

Consider all of your other winter and holiday expenses. Decide what events and activities are important for you and your family as well as the associated costs. If you have kids, get them involved in the discussion while letting them know there are financial limits.

Next, work backwards and divide that amount by the number of pay cheques you’ll receive between now and the end of the year. Set this amount aside in a separate savings account.

Adjust Your Budget – It’s Still Early Enough to Make Changes

If you come up with an amount to save from each pay cheque that seems too high, it’s still early enough to change your plans. Talk to family and friends about starting new gift giving traditions, like drawing names or setting spending limits. It’s easier to have these discussions now than during the holiday season when everyone has already started their shopping.

Make Payments to Your Savings Account to Avoid Credit Card Debts

Keep in mind that saving up ahead of time for a large expense means that instead of making payments to your credit card debts later, you’re making “payments” to your savings account ahead of time. While most people agree that this is a good idea, getting ahead enough to make it work is where the problems arise.

More Payments, Less Excuses

To get ahead and save first, it’s important to set a goal and look for ways to achieve your goal. It’s easy to get side-tracked and make excuses about how hard it is or why it can’t work. Turn things around and look for ways to make it work. Eventually, “can-do” thoughts will take over and your savings account will be something to be proud of.

Alternatives to Traditional Gift Giving Can Be Easier on the Budget

It is often hard to buy for people who “have everything,” so alternative gift giving is gaining in popularity. Spreading gift giving expenses out throughout the year can also be easier on the budget, so keep this mind as you consider whether to contribute towards a bigger gift, combine gifts with travel and visiting plans throughout the year (e.g. spend on an activity while you’re there in the summer rather than mailing a gift card in December), or make deposits to savings accounts (e.g. for teens saving up for a car or post secondary education costs).

Or, if you’re super organized with a solid budget and a gift giving planner, buying gifts throughout the year as you find the perfect item at the right price can also help to spread out the holiday expenses. But sticking to your list and your budget, and of course, not forgetting where you hid the gifts, is vital to making this strategy work!

If Your Christmas Budget Looks Too Tight, Increase Your Income or Decrease Spending

When you start planning early, you have time to adjust your plans or to take steps to achieve your goals and avoid financial problems. This holds especially true for budgeting and setting goals. Right now you have time to look for ways to increase your income or to top up your Christmas savings account with lump sums of cash. July is a much better time for a garage sale than December! If you can craft your gifts (e.g. canning, sewing, or wood-working) starting now leaves you time to enjoy making them, rather than rushing at the end.

Whether it’s for Christmas or other expenses, in addition to increasing your income, top up your savings by looking for ways to decrease spending in other areas of your budget. Recreation, entertainment, groceries and eating out all add up throughout the year and can leave you needing help with debt if you’re not careful.

Planning Ahead for Large Expenses, Even the Ones You Don’t Know About (Yet)

Life happens and large or unanticipated expenses will occur. The trick to avoiding a financial problem that makes you think that you need help with debt is having savings. Even if you’re not sure what to save for, or even how much to save, start a general savings account so that you can pay with cash rather than credit when they do occur. Saving and making smarter choices now can turn into a Christmas (or any large expense) without relying on credit.

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