SPRINGFIELD, Mo. – We may still be in the middle of summer, but the holiday season is quickly approaching. While you might not start your holiday shopping yet, it’s a smart move to begin planning your finances now.

Local financial professional Brad Pistole from Trinity Insurance & Financial Services has four tips to get you started:

1. Put Pen to Paper

  • When it comes to our finances, always make a budget.
  • Start by writing out who you want to buy gifts for. 
  • Fill in gift ideas and, most importantly, a spending amount for each person on your list.
  • Then check it twice! When you go out shopping, make sure you’re sticking to your budget.
  • You may have to cut from one area if you go over in another.

2. Stockpile Savings

  • Now that you know how much you want to spend, here comes the tough question: Do you have the money saved? Or are you banking on your credit cards?
  • If you don’t have the funds, here’s the good news: You have a few months to save up.
  • Look for areas in your overall budget where you can cut back. If you can find a way to put $25 a week aside, you’ll be in much better shape when the holidays roll around.

3. Leave Your Savings Alone 

  • As the dollars start piling up, resist the temptation to spend this money on anything other than holiday gifts.
  • I recommend putting your savings in a separate account dedicated solely to your holiday shopping budget. 
  • The same principle applies to your emergency fund – you should have three to six months of expenses set aside for emergencies.
  • You may also want separate accounts for a vacation fund, new car or anything else you’re saving up for!

4. Negotiate a Gift Exchange

  • Family dynamics are going to be different for everyone. If you’re part of a growing family or dealing with financial restraints, it might be time to readjust gift-giving expectations. 
  • You will need to do what’s best for your situation. For example, large families might draw names and only buy one gift. Some families might purchase gifts for the children and leave out the adults. 
  • Whatever your circumstances, talking about it sooner than later is key. Waiting to have the conversation could backfire if someone has already purchased their gifts. 

BONUS TIP: Use Your RMDs

  • Here’s a bonus tip for retirees: you can set up your Required Minimum Distributions to buy gifts for grandkids or other family and friends.
  • If you’re older than age 70 ½, your deadline to take the money out of your 401(k) or IRA is likely the end of the year, and holiday gifts are a great use for your RMDs if you don’t need the money for living expenses.
  • You can also use your RMDs for charitable giving.
  • Talk to your financial professional to determine how much you need to withdraw and your deadlines.