Set a budget early
The earlier you start planning, the more time you have for saving and reaching your target. To come up with that target, consider all the expenses—big and small—associated with the holidays.
A gift list is the natural place to start, but you might be surprised at how much can be spent on everything else. Think about any entertaining you’ll do and the food and drink that comes along with it, new outfits for those festive bashes, decorations and gift wrap, and even family photos and postage for the annual greeting card.
To get a ballpark budget figure, check your past credit card and bank statements to see what you have spent and withdrawn around the holidays.
Once you come up with a number, count how many weeks you have until the spending frenzy begins. Divide your budget by the number of weeks, and you have your weekly savings goal.
Make a list and check it twice
As the holidays approach, get specific about your spending. Make a list of what you’ll need and for whom, and attach a dollar limit to each item. If it looks like your budget may not be sufficient, consider where you can scale back.
Don’t forget to take stock of reusable or leftover items knocking around. If you have enough gift wrap and decorations from past years to get through another year, you’ll save some cash straight away for other needs.
Be savvy with your shopping strategy. Keep an eye out for Black Friday and Cyber Monday deals, and be ready to pounce when prices drop. Look for discounts on bulk buys that can serve multiple purposes — such as wines for entertaining and for gifting. And check prices on travel early to get the best rates.
Saving strategies for the high-spend season
When starting a holiday savings plan, think about opening a separate savings account to make it easier to track progress and help ensure you don’t raid funds that are intended for necessities like rent and utilities.
Review your spending habits to see where you could trim a little now to make someone’s holiday extra special. Maybe it’s forgoing that daily avocado toast and elaborate coffee drink, or reevaluating the number of streaming services and monthly memberships that have snowballed.
Set aside savings at least once a week, as seeing steady growth of your account can provide motivation. And if you’re dealing with a narrow window of time to grow your holiday funds, you’ll know if your savings strategy needs adjusting sooner rather than later.
If you’ve scrimped on spending, but still worry about falling short, think about how you might make money to pad your savings. Clean house and cash in on items you no longer need by selling them online or via consignment.
Or, try getting a side gig. Rent out a room or join a ride share service. Retailers typically pad their sales forces for the holiday rush; sign on with a favorite for evening or weekend shifts, and you might even benefit from an employee discount.
Finally, if you collect points and earn cash rebates with rewards programs, set them aside to help stretch your stash. Read the fine print, though, to be certain they don’t expire before you need them.
A financially awesome start to the new year
With careful planning and a little sacrifice, your financial plan can survive the holiday onslaught. Start saving early, and you might find yourself welcoming the new year by feeling pretty financially awesome.