Inflation is driving up costs across the board. Here's how to prepare your budget for holiday celebrations.

As prices rise, it's important to consider how this will affect your holiday spending, from travel expenses to festive meals. Here are some tips to help you budget for Christmas, Hanukkah, and other holiday festivities this year.

SET YOUR HOLIDAY GOALS

Start by envisioning how you want to celebrate. Planning your festivities and gift-giving intentions ahead of time can lead to a more enjoyable holiday season.

With rising costs, you may need to adjust your plans. Financial expert Sara Rathner suggests discussing strategies with family early to embrace more budget-friendly ways to celebrate.

According to Elizabeth Pennington, a financial advisor, it's unlikely you'll match last year's gift-giving budget. She recommends identifying what matters most when choosing gifts.

Be deliberate with your holiday spending: what aspects are most meaningful to you and your family?

CALCULATE YOUR BUDGET

While it's uncertain how prices will trend, Pennington believes it's wise to anticipate more increases.

Start by reviewing last year's holiday spending. If you were comfortable with that budget, consider adding 10% to it. Aim to save that amount over the next months, subtracting any savings you've already set aside.

If the total feels overwhelming, reassess your budget and identify areas to cut back, focusing on your family's priorities.

Remember, accumulating debt for gifts or celebrations is not worth it, Pennington warns.

BEGIN SAVING IMMEDIATELY

Rathner encourages starting your savings regimen now. Don't wait until November to figure out your holiday budget. Allocate funds each month so you'll have cash ready for gifts without incurring debt.

Pennington supports this approach and typically urges clients to set aside money for holiday expenses throughout the year.

CONSIDER A SEPARATE SAVINGS ACCOUNT

If you can resist spending your holiday savings, you might keep it in your regular account. You can track your savings using an app or spreadsheet.

However, if you think you might be tempted, Pennington advises establishing a separate savings account, preferably one with no fees.

Set up automatic transfers or direct deposits from your paycheck to keep the funds out of sight until needed.

TAKE ADVANTAGE OF SALES

There are numerous sales leading up to the holidays. Shopping early can help you find gifts without the last-minute stress, Rathner notes.

Pennington prefers to shop year-round, suggesting you set a budget per person and look for deals or utilize price alert tools. If funds are tight, consider making homemade gifts.

PLAN YOUR TRAVEL EARLY

If you plan to travel during the holidays, it's best to start making arrangements sooner rather than later. Rathner mentions that ticket prices rise and availability decreases closer to the holidays.

If your family is flexible, consider shifting celebrations to avoid peak travel times. For instance, Pennington suggests celebrating on the 26th and using points for flights when possible.

Book tickets now if they're refundable, and set up alerts for price drops to snag the best deals.

BE PROACTIVE FOR HOLIDAY PREPARATIONS

While we can't predict the future, we can take steps now to ease financial stress during the holidays. Start saving and consider booking travel if necessary. Keep an eye out for sales to catch discounts on gifts.

Be mindful and realistic about your holiday plans, especially in these inflationary times. As Pennington states, feeling pressured to spend more due to rising costs is where financial trouble can start.