I was in spin class the Sunday before Thanksgiving and my instructor, whom I love, said the key thing to remember this holiday season is to “maintain.” She meant it in reference to weight and fitness, but I thought (being the finance geek I am) that it was also the right message for personal financial fitness this holiday season.

We’ve all read about and maybe experienced the anxiety, blues, tension with loved ones, weight gain, “bad” parenting and other threats to our personal happiness that can occur during the holiday season. As a result of those and other realities, our financial fitness, and our mantra, “spend less than you earn,” can take a backseat to other emotional and familial needs and legitimately so.

With that in mind, and taking a page from Stacey, my spin instructor’s book, I just want you to MAINTAIN your finances. Your goal is to come into the new year, with the same amount of debt (not more), the same amount of savings (plus any year end bonus you might get) and your sanity. MAINTAIN!

Note that I’m focusing on debt and savings in this post as I will discuss cash flow next week in a post about how to budget for holiday gift-giving. The key is that you want to pay for your holiday clothes, gifts, parties, donations, celebratory food and drink, out of your monthly cash flow and not have to break into your savings, spend your annual bonus or acquire more debt.

It’s the beginning of December and the perfect time to think about this, and won’t take long to do. Here’s what I’d like you to consider this month to keep you from diving into your savings or adding to your revolving debt:

1. Make a list like the guy in the big red suit. Include everything (it’s not just gifts!) that will come up for the holidays and estimate what it might cost. Do not be stingy, be as accurate as you can:
   • Food and Drink
   • Decorations
   • New clothes
   • Extraordinary childcare
   • Gifts
   • Donations
   • Travel (if not already booked)
2. You should already know how much full discretionary money you have each month, but if not, make a list of all your “must pay” expenses and subtract them from your TAKE-HOME income. Do not forget an estimate for groceries, gas, and things like gyms, therapy, tutoring, kids’ activities or haircuts. They are “must pay” items too.
3. See if your Holiday List (#1) is less than your Full Discretionary amount (#2). If it isn’t you know you have to trim your holiday list. Wear an outfit from last year, or use last year’s decorations.
4. Keep trimming your holiday list until you can make it fit into your monthly full discretionary spending AND remember to leave yourself a bit for non-holiday full discretionary money for items like dinner with friends, or new sneakers for the kids. I know it might hurt, but your holiday financial hangover will be much easier if you do this.
5. Commit to saving each month through the year for next Christmas!

Next week, I will show you an easy way to set an amount from December’s discretionary money to spend on the holidays, and how to track it so you do not go over. .