According to a T. Rowe Price survey, more than 50% of parents will aim to get everything on their kids’ wish lists this year. Many of these parents will be paying for these gifts for months, or even years, afterward. There’s a better way, and it’s simple: Create a Christmas budget, and make informed decisions about your spending before you hit the shops.

Short-term Effects

Going over your budget every once in a while isn’t a disaster. However, the overspending many parents do during the holidays has a long-lasting affect.

Over half the parents surveyed will pay for their holiday gifts with credit cards. Just 61% of them plan to pay off their spending within three months, and 16% say they will pay it off over the course of six months or more. That’s half a year spent catching up on holiday spending!

Think carefully this shopping season before you drop another item into your cart. Is this gift really worth trimming your budget for the next three – or six – months?

You can also skip the high interest rate credit cards and opt for a Christmas loan. These short-term, fixed rate, personal loans are meant to keep you on a budget since you borrow a set amount. Rates are much lower than credit cards and can save you hundreds of dollars in interest.

Long-lasting Effects

Eleven percent of parents use money from their retirement accounts, 14% have taken funds out of their emergency savings and 11% have taken out a payday loan.

While their kids may be delighted with their gifts, parents can be paying for it for longer than they think.

Taking $500 out of a 401(k) at age 35 translates into giving up $6,000 that was planned for retirement. Parents are paying out additional taxes and penalties to gain access to the money. However, they are also losing the opportunity for that money to grow.

Life Lessons

There’s nothing quite as exciting as unwrapping a present. Kids wait all year for the holidays, and as their parents, you want to make them happy. This is why 60% of the parents surveyed claim they try to check off every single item on their child’s wish list.

Aside from the financial burden, buying every gift your kids want teaches them a host of lessons they’re better off without. Do you want your kids thinking they can always have everything they want? Do you want them to feel that everything they own must always be the best and most expensive?

This holiday season, teach your kids that true happiness can’t be bought.

Be Proactive

Try saving up for the holiday season throughout the year. While it may be too late for this year, it’s never too early to start thinking about next season. Sign up for a holiday club account and put money aside each month!

Be an informed shopper this holiday season, and your decisions will pay off in more ways than one.