Summer is a wonderful time of year – holidays, travel, giving and receiving of gifts, sharing meals with the people we love the most – but it can be followed by a hangover in the form of a credit card bill if a budget has not been set and followed. Get it right and the festive season will be filled with delight and good tidings without any spectre of Scrooge.

The cost of giving

The first step towards a happy holiday season is to set a realistic budget as early in the year as possible and have savings set aside. Being realistic includes budgeting for all of the usual monthly bills as well as petrol costs, car servicing, air fares, holiday and accommodation costs, food and drinks and, of course, gifts. Add them all together then tack on a 10 per cent contingency amount – if you don’t spend this extra cash then you can consider it your special end-of-year bonus.

Early in the new year look around for special Christmas accounts – high interest savings accounts that automatically direct debit a regular amount from your usual account – or simply open a six-month term deposit and put the money aside. When you open specific accounts for particular investment projects, the separation of that money from your usual account helps avoid the temptation to spend it on something else.

For those in large families, it can pay to be smart about who you buy presents for. If the number of gifts is a concern for you, it’s likely a concern for other members of the family, too. Many families organise a Secret Santa arrangement where they only buy a gift of a pre-agreed value for one other person, instead of everyone.

Once you know who you’re buying for, write down the gifts you’d like to purchase for each person. That way you won’t go shopping aimlessly, which wastes time and money, and you’ll also be more likely to choose presents they’ll truly appreciate. This list will allow you to make purchases throughout the year and therefore take advantage of sales.

Seriously smart savers work out where they can take money from in order to fund their festive extravaganza.

If you’re going to be attending parties and lunches over several weeks, for instance, you won’t need that weekly trip to the café for breakfast and coffee. Those frequent flyer points you earned during the year that usually languish in your account could finally be put to good use to purchase gifts. The expensive gift you’re planning for your parents would be even better if it came from a group of people. And rather than buying individual gifts for all of your family members you could instead give them a single gift, such as a family photo shoot.

For many of us, the above tips sound sensible but in reality we have trouble with the discipline of planning and saving, and the festive season can come around as a shock.

Getting your finances in order can be challenging and require expert advice. Your financial adviser can help you ensure the festive season won’t leave you with a financial hangover. In just a few steps you can be in control of your holiday season budget.