Have you created your holiday budget yet? The National Retail Federation reports that U.S. consumers estimate that they will spend an average of $967.13 during this year’s holiday shopping season.

When you don’t have a plan, it’s all too easy to overspend and sap your holiday spirit. Here’s how to create a holiday budget — and make sure you stick to it.

Making Your Holiday Budget

Creating a holiday budget isn’t all that different from drafting your regular monthly budget. It just takes a little thought and number-crunching.

1. Set your spending limit.

First things first, you’ll need to decide how much you can afford to spend over the holidays. Having a set number in mind can help keep holiday spending from turning into a free-for-all.

So, how do you decide on a spending limit? It depends in part on how you plan to pay for holiday purchases. If you’re drawing from a holiday savings account, you could set your budget based on how much you have saved. If you’re planning to use a credit card, you could limit your spending to only what you can afford to pay off in full when your statement arrives in January.

You could also budget for holiday spending out of your monthly cash flow. To do that, you’d need to review your regular budget to see how much money you have left once your bills are paid. Remember, you may need to cut back some of your nonessential spending temporarily to make room for holiday purchases in your budget.

2. Budget for individual categories.

Once you have your overall spending number, you’ll need to break that down for each holiday spending category. This should include what you spend on gifts and wrapping paper, decorations, food and other supplies if you’re planning a holiday get-together, charitable giving, holiday cards, postage for mailing cards or packages and travel.

It may seem a little nit picky, but there’s a purpose. The idea here is to be as specific and detailed as possible, so there are no “forgotten” expenses that you have to account for later. If you’re worried about coming up short, you may want to build a small cushion into your holiday budget for unexpected or emergency expenses.

3. Prioritize and compromise.

Getting your holiday budget down on paper can be a reality check if it’s the first time you’re making a conscious effort to monitor what you spend. After you’ve divvied up your budget dollars, review each category and ask yourself what’s most essential for an enjoyable holiday.

For example, say that the biggest chunk of your budget is going to gifts, leaving you less money than you’d like to plan a big family dinner. Could you add money to your celebration budget by offering homemade gifts instead? Putting what you’re spending and why into perspective can help you tighten your holiday budget so that every dollar has a purpose.

The National Retail Federation reports that U.S. consumers estimate that they will spend an average of $967.13 during this year’s holiday shopping season.

How to Stick to Your Holiday Budget

Making a holiday budget is really the easy part; it’s following it that’s the challenge. Fortunately, there are a few things you can do to stay on course.

1. Track your spending.

One of the simplest ways to stick with your budget is by tracking what you spend. If you’ve got a written budget, you can jot down purchases as you make them to see how much money you’ve got left in a particular category. Or, you can link your checking account to a budgeting app that tracks purchases automatically.

2. Research before you buy.

Before you whip out your wallet, it’s a good idea to do some comparison shopping for the items on your holiday list. Sales abound through November and December, and doing a little research could yield big savings. If that sounds like too much work, don’t worry. Apps like ShopSavvy let you compare prices from your mobile device.

3. Use coupons and look for free shipping.

Besides comparing prices, another way to save is by checking for coupons, promo codes or free shipping deals when you’re buying online. Honey and RetailMeNot are good options for finding savings on the things you buy. If you can’t find free shipping, check to see if ship-to-store is an option to save a few dollars.

Committing to a holiday budget can be a little tough at first, but your wallet will thank you later on. Having a plan for spending can help keep you from racking up debt so you’ll have one less thing to worry about during the hectic holiday season.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.