It's hard to get away without spending money in December and around Christmas time. There's always a party to attend, food to make, wine to buy and last-minute gifts to purchase -- and so many temptations when you're shopping. So it’s more than likely your bills for the next few months will be larger than normal.

How much does Christmas really cost?

According to the Bank of Montreal's Holiday Spending Outlook, Canadians plan on spending an average of $1,397 in the 2011 holiday season -- up approximately 6.5 per cent from 2010. The survey reveals that we will spend an average of $582.70 on gifts, $359.80 on travel, $307.30 on holiday entertaining and $147.50 on miscellaneous expenses.

However, the problem with the holiday season isn’t the amount we end up spending in stores. A recent TD Canada Trust survey indicated that one-third of Canadians will end up buying gifts that they know they can't afford, and nearly one in four will end up financing purchases on credit cards.

While a few hundred dollars might not sound like a lot of money to have to pay off, if it is just being added to existing debt, it could take months -- even years -- before you end up paying off your Christmas debt. Paying just the minimum payment of $15 on a $500 balance at 19.9 per cent interest, for example, means the bill will take more than four years to bring to zero – and an extra $233.90 in interest.

How to avoid overspending

Carrie Russell, senior vice president at TD Canada Trust, says it’s easy to get carried away during the holidays -- but it's important to maintain perspective and stick to your budget. "Squeezing all Christmas spending into one month can put a lot of pressure on your budget," she says. "It's not about being a Scrooge, but rather avoiding common holiday shopping mistakes, so you can stay on budget and enjoy what the season is supposed to be all about -- without worrying about the months that follow, too."

If it's too late for this year, don't worry -- it's the perfect time to get ahead on next year's budget and planning. Start by creating a list of every gift you need to buy, and every party you need to attend. Then decide how much you can afford to spend. Keep track of all of your purchases, and remember not to buy more than you can afford to pay off.

"Set a budget, create a list and remember that a great gift is not about how much you spend, but about the thought you put into it," says Russell. "After all, the holidays are a time to celebrate."

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Krystal Yee is a marketing professional living in Vancouver. She writes about personal finance at Give Me Back My Five Bucks, and the Toronto Star's Moneyville.ca. You can reach her on Twitter (@krystalatwork).