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Save Money, Reduce Stress by Planning for the Holidays Now

Yes, it’s only September, but have you noticed how Wal-Mart, Costco and other stores are bringing out the tinsel and tree ornaments already? It’s annoying how early retailers try to promote Christmas when it’s still beach weather, but perhaps it’s wise to consider following their example. After all, do you really want to pay sky-high airfare for the flight back home for the holidays? Or get stuck in crowded malls the week before Christmas with no idea what to buy that special someone? Avoid all the stress – and save money in the process – by following these tips below.

Make a list, create a budget

You’re making a list of who you want to buy presents for. Then you’re checking it twice to make sure you have enough money to spend on everyone. In between those two actions should come the making-a-budget deed. You need to figure out how much you can spend overall for the holidays – including travel and holiday partying. To get an idea of what you spent last year, dig out your credit-card statements from last December and January.

Mint has two tools that can help you do this. First, you can set a goal for a holiday-shopping budget, enter how much money you need, set a date and link your goal to specific accounts so it’s easy to stick to plan. On a longer-term basis, you can create ”holiday shopping” as a line item in your budget, and Mint shows you how your overall spending decisions will affect how much you have left by the time you need to shop – and also helps you re-adjust your budget in other areas so you’ve got enough to spend for the grandparents.

Now it’s time to make the list, writing down family, friends, neighbors, even the babysitter. Then decide how much you want to spend on each person, keeping the bottom line in mind. Of course, you can reallocate your money as you go along, but it’s wise to buy in order of importance. Don’t forget to include gift wrap and shipping.

Go gift-shopping now

Ideally, it’s wise to buy holiday gifts throughout the year, when prices aren’t given the holiday markups, but you still have three months to find out what recipients want and make your shopping list. Google “gift guides” to search for ideas before you hit the pavement.  You’ll get an idea of what’s easier (and cheaper) to buy online and know what you can only get at a store.  To comparison shop online, use PriceGrabber.com, BizRate.com and DealHack.com. Save extra by buying at sites that offer free shipping if you purchase over a certain amount.

You can save even more money if you decide to make homemade gifts, and here’s where it really pays off to plan ahead (you don’t want to be knitting those sweater sleeves on Christmas morning). While they may take more time and effort than just going to the mall, it is cheaper. Plus the recipient may treasure your gift even more. Some good DIY gift ideas come from Get Rich Slowly and, of course, Martha Stewart.

Book those airplane seats

If you’re planning on traveling during the Thanksgiving and Christmas holidays this year, advance planning is the only way to go. Previous years indicate that airlines start pitching holiday sales right after Labor Day, holiday flights are at their cheapest during the first half of October, and Tuesdays and Wednesdays are the best days to snag a deal. However, you can start comparing airfares now to see what current prices are, then see if they drop in September or October. The best way to find out is compare what’s on offer for several days among multiple providers;  check on their Facebook and Twitter pages, as some airlines offer exclusive deals there. You can also sign up for travel alerts from sites like Kayak or AirfareWatchdog so you’ll be notified when the price changes. Use Bing.com’s Price Predictor to see if there’s a chance the fare will increase or decline.

But don’t ponder a good deal for too long – airline capacity cuts means fewer seats at lower prices, so once you see a good price for your budget, you’ll want to jump on it.

Regarding the land portion of holiday travel, the more you do in advance, the less mental and financial stress will accompany you on your journey. Check for holiday specials by using either a travel agent, an online travel booking site, or by directly contacting the place you want to stay.

If you’re traveling with a large family, ask about group discounts. And be aware of blackouts — be sure that special discounts you had planned on using, like credit-card airline miles or a AAA discount, are usable during the holiday season. You may want to see if traveling just before or just after Christmas can save you money or reap better options on accommodations.

Earn more money

There’s a few ways to shore up your gift-buying account in the next few months. One is to get a part-time job or take on tasks that will give you some spare change. If you have items you need to return stores, use the cash you get back for your holiday account. Or if it’s store credit, save it and come back to use it on a gift for someone on your list. And now’s the time to use those reward points and cash-back deals on your credit card. If your card lets you get airfare miles, now’s the time to redeem them for a trip home for the holidays.

Vanessa Richardson is a freelance writer in San Francisco who writes about small business and personal finance.