Don't let holiday spending, be a financial pitfall, that encumbers your new year. As you embrace the beauty and cheer of the holiday season, you should also embrace a holiday budget. Adding line items for holiday gifting, holiday decorating and holiday entertainment to your budget, will help keep your finances in check. When determining the amount of each line item; you need to make sure that your holiday budget does not consume a disproportionate amount of your overall budget; and that you can actually afford it. Your generosity during the holiday season should be tempered by your financial realities; so that you are not left in financial peril, when the season ends.

Establish a list for holiday gifting including spending limits and gift ideas for each person. Don't forget your housekeeper, mail carrier, door staff, hair stylist and others who you want to tip during the season; taken separately a tip may be small, but combined they can add up to a significant amount.

Be thoughtful about gifts selections, because items that will be later returned or set aside and eventually discarded by the recipient, are a waste of time and money. Also, shop around for the best prices online and off-line, but remember regardless of the price, you cannot save money by purchasing items that are not wanted and/or not needed.

Be sure to take the cost of shipping into account when doing price comparisons. Successful gift buying is time consuming, so start as early as possible to avoid last minute desperate purchases. If you are unable to find a relevant gift, consider a gift card to an establishment that is frequented by the recipient.

Perform a complete inventory of your existing holiday decorations before buying new ones. These items can be expensive, and they take up valuable storage space, so you should only purchase what you need. Holiday parties and other entertainment are a part of the season; but they can be costly and therefore should be included in your budget.

Your budget is not supposed to restrict your happiness, but it should provide guidance and bring perspective to your everyday decision making.