Well, Christmas is coming. We've got about two and a half months until Christmas Day. Are you ready for Christmas just yet?

Christmas is always an expensive time of year. There's presents to buy, food to consume, alcohol to drink, and friends and family that want to spend time with you. So there's also travel expenses to consider. How to Cut Your Christmas Costs This YearAll together it can cost a lot of money to be social during the holiday season.

Holidays should be about relaxing, sitting back, and taking a load off. So if you're nervously waiting to pay your dinner bill, then how will you enjoy the company of your friends?

Instead of anticipating a stressful and frustrating winter, plan ahead, take care of the shopping now, and help yourself enjoy this upcoming Christmas.

Set a Budget

Be realistic about how much you can afford to spend over Christmas. It's tempting to want to spend money on people that are special to you as there's an emotional component to giving gifts.

You want to reward the people most important in your life with a physical representation of how much they mean to you. This can be a good thing. For some people, gift giving is the best way to show someone that they care. What we've done over the last couple of years is we set a budget for Christmas gifts.

We make a list of everyone that we're going to buy presents for, and we set a budget for gifts. This way, we're not stressed or worried about how much we should be spending on one particular person, and we can start planning in advance for how much Christmas will cost overall.

As for the budget itself, that totally depends on your own personal financial situation. Our yearly budget changes, depending on what type of gift exchange we're doing with our family. We make sure to talk about it as an entire extended family so that everyone has the same expectations.

A few things you can do to make sure your budget is reasonable is make sure you're only giving gifts to those that are returning gifts. Chances are good that if you haven't received a gift from a friend for a couple of years, exchanging gifts is not a priority for them, and most likely won't mind if you don't get them one this year. When in doubt, it's always good to just ask and confirm.

Make sure that you're limiting the cost per person. Buying a gift that is quite a bit of money can actually make the other person feel awkward and indebted to you. For kids and babies, something in the $20-35 range should be adequate, and for adults, $40-80 should also suffice.

Buy in Advance

Another great strategy is to get the shopping part done early. I suggest finishing your Christmas shopping by halfway through November. There's a couple of reasons for this.

First and foremost, it'll reduce stress for you. Hitting December 1st and having no more gifts to buy is a massive assistance to your personal health and well being. December can be busy enough as is without forcing your free time to be spend wading through hordes of shoppers at your local mall.

Secondly, it'll save you tons of time. Everything takes longer during the holiday shopping season. The drive takes longer because there's more cars on the road and the weather conditions are worse. The parking lot will be full and it'll take more time finding an available spot. There will be more people to walk around while you're searching for that gift that you're not sure about yet, and once you've picked it, the lineup at the cash register will be longer than normal.

As a great bonus, by purchasing the gifts in October, you'll be splitting up Christmas costs over a few different paychecks, so if there are any unexpected expenses for a gift or for travel, it'll be more easily absorbed over a longer period of time.

What are your strategies for dealing with Christmas costs this year?

About Alan Schram

Alan Schram writes about personal finance and his encounters with it in his everyday life. Alan is recently married and is looking to save money on expenses and reduce his debts.