It doesn’t matter when you’re reading this…
Next Christmas will be here before you know it.
If you’re like most Americans, holiday spending is an area of your financial life where you can improve. Let’s take a look at the facts: The average holiday spending per person comes in at $1,131 each year. But that’s not the worst part. Over 65% of people put this spending on credit cards. In many cases, the debt isn’t paid off by the time the next holiday rolls around.
Here’s the reality: It’s impossible to fully enjoy these meaningful moments if you’re stressed and worried about your finances. Financial burdens have a funny way of lingering in the back of our minds until we resolve them.
Fortunately, you can celebrate without breaking the bank by planning in advance. It takes intentional planning, but you reduce and eliminate stress by saving now for future holidays and special events.
For me, Christmas will always be my number one spending holiday. The second biggest occasion I spend money on is birthdays throughout the year. I have found that taking a little time now can save you a lot of stress and money later.
But before you can start saving, make sure that you have a realistic budget in place. This will allow you to prepare without inadvertently hurting other categories in your budget.
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Make a list of everything you need for your upcoming holiday or event, and prioritize them by importance. By identifying the most important expenses, you can focus on what really matters and avoid splurging on unnecessary purchases.
Items you should put on your list include, but are not limited to:
These are just some of the expenses that can pop up when you celebrate the holidays and special events.
Be sure to continuously update the list as other unexpected expenses make themselves known.
Remember, it’s impossible to save if you don’t know what you’re saving for. This list will help you estimate your financial needs for the holidays and special events. This list will also help you differentiate these expenses from your ongoing regular bills that you’ll have to pay regardless.
Plus, this will help you stay organized and ensure that you don't forget any essential items. So make a list, check it twice, and save money while you celebrate in style!
Consider setting aside a small amount of money each month to save for the holiday or event. This will make it easier to afford the expenses when the time comes.
But saving money is more than just about putting money away in your savings account.
Saving money also comes in the form of getting a good deal.
Consider the following:
If you get a discount on an item you purchase, then put the difference into your savings. For example, if you buy a gift and it’s $10 cheaper than the original price, then go ahead and put that $10 towards your holiday and special events fund. This way, you get more bang for your buck!
Plus, it can be a fun way to challenge yourself towards being more frugal.
Many people use credit card rewards points for travel – so why not holiday expenses?
Most financial advisors recommend trying to pay for everything in cash or with a debit card to avoid going into debt. Using credit can make it harder to pay off the expenses later and can lead to high-interest charges.
However, if you can pay off your credit card bill in full every month, then it’s not a bad idea to use those reward points to your advantage. The key is to always stay on top of your monthly bill.
Here are some of the ways rewards points can help you out during the holiday season:
While you can use rewards points for anything you want, having a specific purpose for them can really help you be more intentional about how you collect and spend them.
Look for ways to cut costs on the things you need to purchase. For example, you can save money on decorations by making them yourself, or you can save money on travel by driving instead of flying.
Instead of buying expensive gifts, consider making your own gifts or giving homemade items as gifts. This can be a fun and personal way to show your appreciation for others without breaking the bank.
Not crafty?
No worries! You can also save money by shopping away from big box retailers.
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Look for gently used items at thrift stores, yard sales, and online marketplaces. You may be able to find what you need at a fraction of the cost of buying new.
Finally, look for free activities and events in your area that you can enjoy with your friends and family. This can be a great way to have fun and make memories without spending a lot of money.
For me, I am a cash envelope gal! Almost all of my savings cash for goals that are less than a year is put into a cash envelope that I use for spending.
This article has more information on where to stash your cash for short-term savings goals.
For other savings goals, I also love CIT Bank because they encourage saving by offering an APY that is 4X the national average.
The goal is to be intentional about where you store your money.
Why?
Because if you store it in your everyday checking account, it’s extremely tempting and easy to spend that money when you should be saving it.
By keeping these savings in a designated place, you’re holding yourself accountable so that you can achieve your goals – and that’s what this is all about!