“It's the most wonderful time of the year,” according to the lyrics of Andy Williams' blockbuster holiday song.

With the holiday season about to kick into gear, retailers struggling this year will do what they can to get you through the door to shop until you drop.

Mailboxes are being filled with exclusive events for VIP customers, deals sounding too good to be true are flashed on your computer screen. You're presented with cash-back opportunities in return for spending a certain amount of money, which at first blush seem to be a great deal. And the ease of online shopping just a click away can all start to add up. Quite literally.

Stop! The reality is, you can go broke trying to save money.

This holiday season, set yourself up for success. Budgets get a bad rap and there's a long list of reasons some have on why they're ineffective -- the most popular being they're just too hard to stick to.

A lot like dieting, deprivation doesn’t work in the long run and even if you lose the weight, many go on to gain it all back, and then some. It's the same sort of situation with budgeting. You scrimp and save, only to see some success, and then you throw caution to wind and it's the one big purchase that puts you back into debt, and then some.

I believe budgets work. Here’s why:

  • Budgets allow you to know how much discretionary income you have. That is money left over at the end of the month that isn’t accounted for.
  • A budget is a work in progress. It is not a static document and some months your expenses will be higher than others. As more money comes in, the budget can expand and of course, if there is less, a pull-back in spending is mandatory.
  • The budget is personal and yet not emotional. It should clearly outline how much money you can afford to spend versus how much you would like to spend, on others as well as yourself.

I’m the first to say I will take advantage of deals. However, I do budget, I stick to the budget and adjust it as life dictates. It is the only way I can keep track of what I'm spending and that allows me to ask the question – why am I spending?

Here are our top three tips:

  1. Give yourself some wiggle room. You really don’t have to account for every dime you spend. We have put spending thresholds in place that require full disclosure and a discussion with one another if we intend to spend above our agreed upon level. As our income has increased, so has the threshold amount.
  2. No secret banks accounts. We have decided to have one household account to get a better picture of our overall financial situation. I respect that isn’t for everyone. What's important here is to figure out what works for you and share your financial data. You are in this relationship emotionally and financially.
  3. Re-evaluate the budget. When there are changes to your income, make adjustments to your spending immediately. Our top priority is to pay ourselves first a percentage of our income for savings. It doesn’t matter if it is 1 per cent or 10 per cent, it is about the discipline around not spending everything you have coming in.