How to avoid a huge end-of-year holiday bill

Believe it or not, holiday shopping starts to heat up during the final days of summer. By the time Labor Day rolled around, one in six Americans had already started work on their gift lists. Shopping early can be convenient. Early shoppers can avoid crowds and spread their holiday budget out over several months. Some holiday shoppers are already out there searching secondhand stores for classic records and books, buying out-of-season clothing and sporting goods at steep discounts and using department store coupons to save money. To get a jump on your holiday shopping and avoid big end-of-year bills, consider the following:

Create a holiday budget early. Start the budgeting process by reviewing last year’s holiday purchases. Be sure to include decorations, food, clothes, stamps, cards, wrapping paper, event tickets, meals out, holiday entertainment and office party gifts. This should give you an idea of how much to allot this year.

Create a spending plan. Divide your budget by the number of months or weeks until the final shopping day and pace yourself. For example, if your budget is $1,000 and you have three months until the holidays, try spending $325 a month. This will make it easier for you to absorb the cost of the holidays and to avoid the trauma of having an extra $1,000 on your January credit card balance.

Know what it all costs. Even if you finish your gift buying early, realize that the holidays involve many more expenses than just gifts. Don’t forget the incidentals such as gift-wrap, shipping, greeting cards, postage, charitable donations and babysitting.

Know when to stop. When you finish shopping—stop! Sometimes it’s hard to resist the “one extra little gift,” however, even small items can add up to be budget-breakers. Three out of every four adults purchase presents for themselves when shopping for friends and family, according to American Express.

The key is to have a plan. It doesn’t matter when you buy as long as you’re smart about it. If basic budgeting skills are followed, savvy shoppers will find themselves sipping eggnog in front of the fire, while the rest of us are battling over the last Spiderman toy.