For me, the final months are indeed the most wonderful time of the year. The leaves are changing, the weather is cooling down, and the holidays are only a few weeks away. I always look forward to taking a break from daily life to spend time with my family and enjoy our favorite holiday traditions together. However, it can be difficult to not let the festivities interfere with your financial plan. So now that there is a chill in the air, ’tis the season to start saving.
Getting a Head Start on the Holidays
I have a hectic schedule to maintain. So if I don’t write them down, I can easily lose track of things, including my finances. Although online banking has helped me monitor my activities, spending can quickly get out of hand around the holidays if I don’t stay on top of it.
But, pinching pennies before Thanksgiving and Christmas makes me feel like a Scrooge. Part of the magic of the season for me is embracing the holiday spirit. As part of this, I want to show my love and appreciation to everyone in my life. While generosity is great for my relationships, it isn’t always good for my budget.
However, it gives me some relief to know that I’m not the only one. Based on the responses in a post-holiday survey, 78% of people say they won’t be able to pay off their holiday debt in January, with 15% of people only making minimum payments.
But if I want to keep pace to meet our long-term financial goals, I have had to exert more self-control with my spending, particularly in the weeks leading up to Christmas.
Since it is hard for me to resist temptation, the answer to my spending problem is to plan ahead. Therefore, my husband and I make a list of all the planned holiday expenses including gifts, meals, and transportation to set our budget. Then we can calculate the estimated costs and set the holiday savings goal. Not only does this provide more structure to reign in our finances, but it also helps me avoid the temptation of impulse buying.
Tips for the Season to Start Saving
Unfortunately, not everyone is a natural saver. It can be hard to put any money away when you are struggling to pay your monthly bills. However, with a little discipline, good planning, and a head start, you can get ahead of your holiday spending. Here are a few tips since it is the season to start saving.
1. Plan ahead for large expenses.
Like clockwork, I know that my budget will double during the month of November. Therefore, I adjust my savings habits throughout the year to accommodate this increase.
However, the amount we spend and our incomes have changed a lot over the years, especially since our circle of family and friends has grown. So, we have to adjust our savings goal to match. This year, we will be attending and preparing dishes for 4 separate Thanksgivings. Then, there are the office parties and holiday get-togethers with friends. And, don’t forget the New Year’s celebrations as well.
On average, I usually expect to spend an additional $2,500 around the holidays, if I’m being conservative. But, planning ahead has made it easier to save since we set aside a little each month. Not only does it make the savings goal more manageable, but it also relieves some of the financial pressure.
2. Maintain a dedicated holiday expense account.
Keeping a dedicated savings account is another way to ensure you reach your savings goals. Rather than stashing cash around the house where I would be tempted to spend it, I created a dedicated account where I could contribute money throughout the year. You can also find apps that will help you automate your monthly savings.
I put money away each month so I can go on a guilt-free holiday spending spree. By saving a little from each paycheck, I have more than enough to cover all my purchases. This has removed most of the stress and nearly all the financial pressure of the holidays. With a dedicated account for holiday spending, I can enjoy the celebrations instead of losing sleep worrying about our expenses.
3. Look for deals throughout the year.
Most shoppers know that you can usually find the best deals of the year on Black Friday and Cyber Monday. So, my husband and I postpone larger purchases to take advantage of the discounts. It’s also a good time to finish shopping for any gifts left on the list.
But, good deals aren’t limited to this weekend alone. Most retailers advertise sales around all major holidays. If you are looking for something specific, start looking for deals throughout the year. When I find things I’m looking for at a good price, I buy them and store them away until Christmas. If all goes well, most of my holiday shopping is done before the season even begins.
Find Ways to Trim the Budget
While it is important to build strong savings habits, you can accelerate your savings by finding ways to trim your budget as well. The less you spend on unnecessary things, the more you can put toward the things that matter most to you.
- Stop wasting money on things you don’t need. The first step is to track where your money is going. Then you can determine how much you are spending each money and which expenses you can eliminate.
- Lower your budget. To help reduce holiday expenses even further, you can set a very low budget. Sometimes we forego exchanging gifts altogether, or we’ll draw names so we only have to purchase a single gift.
- Think about the menu. Hosting a potluck style can also cut down on costs. Since I have to prepare a dish for each get-together, I plan similar dishes that use the same ingredients so I can buy them in bulk and save even more.
Don’t let your spending habits put you on the naughty list this holiday season. Embrace that it is the season to start saving and stay ahead of the spending frenzy.