How to plan out holiday bills -- starting now

By Marianne Curphey

As the last quarter of the year begins, it's time to start thinking about Christmas, Hanukah and other holiday shopping. Though autumn has only just begun, three months isn't that long to spread out your spending, so get organised now and save yourself the usual holiday hangover in January.

Add up your budget, then divide it
If you receive bi-monthly paycheques, you only have about six or seven more until Christmas.

"Think about how much you can afford to spend, and create a budget per person," says Wilma Allan, money coach and founder of The Money Midwife, which helps clients tackle money problems by focusing on the connection between mind and money. Consider each person on your list, including those that may crop up at the last minute or even including a buffer in case you realise you forgot someone. "Remember to include food and festivities in the budget and factor in the cost of going out. Put a price on everything. Then total it up and divide by the number of weeks you have left."hoilday-shopping-plans

The figure you come up with might be a shock, but it could also help you understand how you end up overspending every December.

"The pressure to buy for family, friends and neighbours is huge at this
time," Allan says, "but you need to start from what you can afford to spend, not from what you feel you should spend."

Take your weekly figure and determine how much you need to set aside
per paycheque (whether you get paid weekly, bi-monthly or monthly), and put that amount of cash in an envelope or a separate account specifically
for holiday spending, she says. Then you can either use that fund as you find gifts, or, if you want to wait for Black Friday and other deals, you'll at least know you have the money waiting.

Use your credit card wisely, not as a crutch
Of course, one of the most common ways to pay for Christmas is to use a credit card. According to Bank of England statistics, credit card lending increased by £0.4bn in December 2015 compared to the average increase of £0.3bn in previous months.

Used wisely, cards can help you manage your spending, but you do need to think about how you will use them, rather than just running up debt with no plan to pay it off.

The first option would be to take the same "divide and conquer" method and apply it to your card spending and repayments rather than putting the money in a separate account or envelope. Figure out how much you can spend per paycheque, spend only that amount, then pay it off (even if this means making a payment or two before your bill is actually due). This route is helpful if you want to take advantage of any credit card rewards or if you simply prefer to spend on your card, but want to stay in budget.

Another option is to apply now for a card with a 0%  interest rate on purchases, says Andrew Hagger, founder and director of the independent money information service MoneyComms. However, there are a few catches to doing this. Often, to take advantage of these deals, you'll have to make a minimum purchase within a certain period -- usually 60 to 90 days -- and you cannot make any late payments, or you'll negate the offer, he says, leaving you with a high APR.

Some of the longest 0% deals on the market are 23 to 26 months, but it would be wise to have a plan to pay it off quickly, even if you won't be paying interest. "You don't want to be paying off your Christmas spending for two years," says Hagger.

However, this route does allow you to divide your Christmas total by a few more weeks. You could set a goal to spend £700 on gifts and plan to pay it off between the end of September and the end of February. That would allow you to pay only £70 per bi-weekly paycheque -- much more manageable than spending £117 per paycheque between September and December for the same total.

Start early to save later
Regardless of how you break up your winter spending, it's still likely to save you some money if you start sooner rather than later.

First, it can keep you from overspending. If you only have a certain amount to spend, you might rethink adding gifts to your list at the last minute or giving in to the temptation of "great deals" that you don't really need. Your funds will be limited, so you're more likely to treat them a little more carefully.

Additionally, if you are already on the lookout for gifts now, you can avoid the last-minute panic that can lead to a more expensive purchase, or even paying more for hot-ticket items that get marked up at the last minute.

Finally, you'll be paying ahead, before you reach the end of the holiday season, rather than paying backward. It may be much harder to be disciplined in paying something off that is, literally, last year's news. If you have a plan now, and even start saving, you can be sure that this year's debt isn't going to put a damper on next year's financial resolutions.

See related: 'Buy now, pay later' offers can leave you with debt headache, Understanding gift card risks, Survival strategies for shopaholics at Christmas

Updated: 26 September 2017