The 4-Step Plan to Financially Prepare for the Holiday Season as a Creative

The holiday season is a time of joy, celebration, and let’s be real — spending! However, for many of us, that joy gets overshadowed by financial stress.

Whether it’s guilt from overspending on gifts, or regret when January 1 hits and our bank accounts look rough, holiday spending often feels like a game we lose.

What if planning your holiday spending could actually increase your joy, rather than feel like a restriction? I’m going to walk you through how to plan your holiday finances in a way that brings you more joy and freedom, without sacrificing the fun.

Insights: What You Need to Know About Financial Planning for the Holiday Season

Make a detailed list of all holiday-related expenses, including gifts, decorations, activities, travel, hosting, outfits and baking. Assign estimated costs to each and compare the total with available savings to ensure the plan is realistic.

Aim for a final spending number that feels comfortable and doesn’t induce stress, allowing for spontaneous holiday activities that may arise.

Open a dedicated savings account or use a separate credit card specifically for holiday expenses to keep track of spending without mixing it with regular finances.

Myth busting: planning means restriction

The first thing we need to clear up is a common misconception: planning does not equal a spending restriction. Many people avoid creating a holiday spending plan because they think it’ll suck the fun out of the season. They believe it means cutting back, being overly responsible or putting themselves on a tight budget.

Here’s the truth: planning doesn’t have to mean cutting back. You could plan to spend more if you want.

The whole point of a plan is for you to not surprise yourself at the end of the holiday season with what’s on your credit card statement. This way you can make financial decisions when you can still change things, instead of playing clean-up crew in January.

One of the sneakiest causes of holiday stress is decision fatigue. Constantly weighing whether you should buy something or not can wear you out. Planning takes that weight off your shoulders.

By deciding how much you want to spend (and what to spend it on) in advance, you can eliminate all those mini-decisions that drain your energy. You’ve already done the hard work upfront, so that you can just enjoy the season without the mental bargaining.

STEP 1: Visualize your best holiday season

Before you start thinking about numbers, it’s important to ground your holiday spending in what truly matters to you. One way to do this is through a visualization exercise.

Take a moment to picture the start of your holiday season. Maybe it’s that first chilly morning, or perhaps the moment you see the holiday lights going up around town. Feel the excitement building. What are the key moments you’re looking forward to? Is it decorating your home, buying gifts, going to a holiday party or sharing meals with loved ones?

Now, fast forward to the end of the season. Imagine scrolling through your camera roll on your phone. What are the highlights? Which moments made you smile? Was it the time you spent with family, the cozy evenings with hot cocoa, or the little gifts you gave to friends?

Once you’ve envisioned the holiday season you truly want, jot down a few words that capture how you want to feel — words like “cozy,” “joyful” or “connected.” These words become your North Star, guiding your spending so it’s aligned with the experiences that matter most to you.

STEP 2: Create your ideal spending list

Before we get into the nitty-gritty of budgeting, let’s focus on what you actually want. Start by creating your ideal holiday spending list. This isn’t about restrictions or cutting back; it’s about identifying what brings you joy without worrying about the final cost — just yet.

Take a journal or a note app, and break it down into categories:

Gifts: List all the people you plan to buy for — family, friends, colleagues. Don’t forget small traditions, like cast gifts if you’re involved in a yearly Christmas production.

Decorations: Whether it’s a new Christmas tree or updated holiday décor, include these items. Don’t forget to add fun things like festive earrings or a new holiday sweater!

Activities: From holiday shows to ice skating, or tickets to see the Rockettes, list all the activities you want to experience.

Travel: Include everything from plane tickets to the cost of meals, plus the Airbnb you are staying at with family.

Hosting and Parties: Whether you’re hosting a dinner party or buying a gift for the host at someone else’s gathering, this is a big part of holiday expenses.

Outfits: If you need a new dress for a formal work party or simply need winter boots, include these items on your list.

Baking: For those who love baking, list your supplies. Homemade gingerbread houses aren’t cheap!

Once you’ve listed everything, assign an estimated dollar amount to each item, and then total them all up for one final number.

Do you like the number? If it feels too high or too low, why? Now, take a look at your actual savings. Do you already have that amount set aside? If not, are you able to start building that fund now? It’s important to assess whether you can realistically meet this number with your current finances.

Now ask yourself, “how do I want to feel in January when I look at my bank account?”

This reflection will guide your next steps. If the total number doesn’t align with how you want to feel post-holiday season, it’s time to reassess.

STEP 3: Make your new holiday money plan

To adjust, consider your spending priorities. Go back to the visualization exercise and think about which categories bring you the most joy. Funnel more of your money toward those top priorities.

This is where you’ll notice the magic of feeling like you’re spending more, while actually spending less. When your spending is aligned with what truly matters, the things you choose not to spend on won’t even feel like a sacrifice.

A great way to assess whether your new number is reasonable is by reviewing your spending from last holiday season. Look at your bank statements and subtract your bills to see how much you spent on extras during the holidays.

This gives you a benchmark for your current budget. For example, if you spent $1,000 last year and your ideal number this year is $200, you may need to reconsider.

Your final number should feel spacious. The holidays aren’t about penny-pinching or feeling restricted. If your initial budget feels like a tight squeeze, bump it up slightly to give yourself breathing room. You don’t want to spend the season stressing over every purchase.

Once you’ve got a number that feels good, release the detailed line items. Treat your holiday budget like your regular flex budget. You’re not keeping a tally of every dollar, but keeping an eye on the overall total as you spend.

STEP 4: Set aside the money, then spend it!

Once you know your total holiday spending amount, it’s time to start saving. Create a savings bucket specifically for holiday spending (you can do this with the savings bucket feature with a bank like Ally, or open a separate savings account at the bank you currently use), and start funneling money into it over the next few weeks to hit your goal.

Now that your holiday savings are in place, decide how you want to manage the actual spending once the spending begins (usually at the beginning of November). Here are three options:

Use a separate credit card: If you have a credit card that you don’t normally use, you can dedicate it to holiday spending. This makes it easy to track all your purchases in one place.

Track in your notes app: If you don’t want to use a credit card, you can simply keep track of your purchases in a notes app on your phone. Each time you buy a gift or book an activity, jot down the amount. This low-maintenance method keeps you aware of your spending without requiring spreadsheets or detailed tracking.

Open a separate checking account: If you prefer to use a debit card, consider opening a separate checking account specifically for holiday spending and filling it with the amount of money you decided on at the start of November. This way, you’ll have a dedicated card for holiday purchases, and you can easily see how much you’ve spent without any mental math.

Now you can go and enjoy spending it!

It’s important to note that there is no “normal” amount to spend on the holidays. Everyone’s holiday plans, financial situations and family dynamics are different. The goal is to create a plan that feels right for you, not to meet some arbitrary holiday spending standard.

When you finalize your plan, sign off on it with confidence. Be excited about the money you’ve allocated, and look forward to spending it on the things that matter most to you this holiday season.

The beauty of planning is that you get to decide where your money goes. It’s not about cutting back; it’s about putting your money toward what brings you the most joy, so you can step into the holiday season feeling empowered and stress-free.

By following these four steps, you can create a holiday money plan that feels intentional, aligned with your values and easy to stick to — making the holidays a time of joy rather than financial overwhelm.