While it may still seem early, Christmas is coming – and fast. No matter the year, it seems like the holiday season sneaks up on just about everyone. Instead of being able to focus on spending the season with family and friends, many people find themselves stressed and wondering how to pay for gifts, travel, and holiday entertainment.
Instead of putting Christmas spending on a credit card and taking all spring to pay it off, why not simply reverse your thinking by planning plenty in advance?
It’s much easier to prepare for the holiday season little by little. Use these tips to start saving for Christmas now.
1) Set Your Spending Limit
It’s easy to overspend on Christmas. To prevent spending way more than you would like, you need to start by creating a budget.
Look how much you spent on Christmas gifts in prior years. Did you tend to overspend? How many people did you have to buy gifts for? Are there obvious ways you can cut back on spending?
The easiest way to set a budget is to start by writing down your giving plan. Create a list of every gift you want to buy. Decide your gift-giving strategy. Will you give one gift to everyone? Several gifts for your family members? What about smaller gifts for friends, coworkers, or service workers?
Next, consider how much you cold save every month. This will allow you to see if your ideal gift giving plan is actually realistic. If it’s not, you will either need to cut back on the gifts, or find a way to increase your savings rate so you can afford all of the gifts you want.
2) Start Looking for Deals Now
Now that you have a list of all the gifts you want to buy, you can start shopping. There’s no need to wait until closer to Christmas. In fact, you’re more likely to find better deals if you can take advantage of all the sales that go on before the holiday season, such as Black Friday, Cyber Monday, Labor Day, and other sales.
By starting to shop now, you also can spread out your spending, making it feel like less of a blow to your budget.
3) Do It Yourself
What better way to show someone you care about them than making a homemade gift?
While not everyone is into DIY projects, it can go a long way to save you money. Whether you are into woodworking, sewing, crafting, or baking, DIY gifts can be made at a fraction of the cost as other gifts. Just be sure to start early so you have plenty of time to complete everything.
4) Set Up a High-Yield Christmas Savings Account
This may be more beneficial for next year when you have an even longer lead-up time, but setting up a separate savings account specifically for holiday purchases can help you save year-round instead of in a short period of time.
By setting up a high-yield savings account, you can earn a little extra interest on the money you have in the bank. Keeping a separate savings account for holiday spending is a great way to ensure you don’t accidentally (or intentionally) spend the money on something else.
Pro Tip: This works for any designated savings, such as a car fund, house fund, electronics…anything that you know you will spend money on down the road.
There are plenty of high-yield savings accounts out there. You can read about some of the best accounts here.
5) Cut Back on Spending
If you need to cushion your savings goals even more, now is the time to start cutting back on spending if you need to. Any money you don’t spend you can put directly into your holiday savings fund.
Look for opportunities to save money. Perhaps you start by examining your bills to see if there is any service you can cancel, such as cable.
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How do you save for the holidays? What do you think you could do differently this year?
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Great ideas! It’s always a good idea to think ahead when making big purchases.
Always a good idea!