I do it all the time. I figure I’m right on track with my budget. I’m so proud of my budgeting prowess. Until…my friend’s birthday comes and goes. Then an anniversary, Mother’s Day, a few more birthdays, more holidays yet, and of course – the ever-present Christmas. When I’m left to pick up the pieces at the end of the year, I wonder what happened to my excellent budget. That is, until this year: I started keeping a gift calendar.

Planning out gift giving occasions on the calendar not only helps to create an accurate budget, but it is also a great way to organize yourself. Until recently, the birthdays of my friends and family were either committed to (my rather shady) memory, or scribbled on a piece of paper I inevitably forgot to reference in time. And missing a birthday or (gasp) an anniversary is rarely a good thing.

The premise is easy. Simply sit down with the following:

• Monthly Calendar
• Pen/Pencil/Markers
• Your Budgeting notebook/spreadsheet

Brainstorm all the gift-giving occasions you can think of. Be sure to include all the standard holidays, for example:

• Valentine’s Day
• Easter
• Mother’s Day
• Father’s Day
• National Holidays
• Thanksgiving
• Christmas

Then concentrate on birthdays:

• Mum
• Dad
• Kids
• Siblings
• Other Relatives
• Friends

Mark these gift-giving occasions on your calendar, and write them in your budgeting notebook or spreadsheet, leaving space to fill in specific gift suggestions and price tags. Your gift suggestions and price tags will likely be a work-in-progress throughout the year. But for initial budgeting purposes, fill in amounts that are reasonable estimates given the occasion.

This exercise is not an invitation to find more opportunities than normal to buy stuff and stress your budget! So if you wouldn’t normally give your friend a birthday present, don’t put it in the gift calendar budget. It will still be nice to remember the occasion now that it is marked on the calendar. However if you know that a celebrative evening could entail a night on the town, you may want to include this expense in your gift-giving budget if it is not worked in somewhere else.

As another example, if on Thanksgiving you don’t tend to give gifts, consider the expense you might bear bringing a nice bottle of wine over to a Thanksgiving dinner, or even hosting the dinner itself. What about decorations? If there is an expense associated with that holiday that makes sense to incorporate into your gift calendar budget, then do so.

Even with this level of planning, your budget can still go completely awry with unexpected gifts. So, while you are brainstorming, build a contingency into the budget for those gift-giving occasions you can’t anticipate, for example:

• Birthday gifts for parties your child attends
• Office pools for retirements, maternity leave, etc
• Gifts for new friends (birthdays, baby showers, etc)
• Wedding & Engagement gifts
• Condolence & Get Well gifts

Since you can’t accurately anticipate the cost of these unexpected gifts, it is best to air on the side of caution. Better to overestimate a budget and come in under than it is to underestimate and have a nasty surprise.

Gift calendar budgeting is an activity the whole family can participate in. Kids will enjoy coloring each day of celebration in the calendar, and teenagers can help with budgeting and gift selection as part of their own financial education.

Using a Gift Calendar is also a great way to schedule out your year. With these events clearly laid out, you can avoid unwittingly scheduling in conflicts – or at least forgetting to call on the big day. And with a decent budget in place to help you stay on track, you can use your gift calendar to proudly eliminate one of the biggest budgeting pitfalls.