The approach of the holidays certainly conjures up feelings of joy but all too often, that joy is accompanied by anxiety. Thinking of all the people you need to shop for can be overwhelming, especially when you start to add up the associated costs.
Instead of resigning yourself to a very frugal January, you can plan ahead to make sure you’ve set aside adequate funds to purchase presents for the people you love. Below are a few tips to get you started.
1. Create a separate savings account
This step is key because if you don’t have a separate holiday savings account, it is astoundingly easy to spend the money elsewhere.
Some banks have special programs that help you contribute to a holiday savings account. For instance, FAB&T has a Christmas Club where customers select an amount to deposit from their FAB&T checking account to their “club” account each week of the year. When the holidays roll around, the amount is transferred back to checking so customers can use it for holiday shopping.
Whether you choose an automated option or just create a separate savings account, it’s important to earmark the money you’re saving for the holidays FOR THE HOLIDAYS if you don’t want to come up short.
2. Do some math
Some of the anxiety you feel could stem from the unpredictability of the project at hand. Not knowing how much you need or whether you’ll have enough can definitely stress you out. Combat vague worry with exactitude by calculating how much you spent on holiday gifts last year. It might be hard to get exact, but credit card statements and other records from last year can help you arrive at a ballpark figure.
Compare what you spent last year to how much money you have set aside now to calculate the gap and define your goal: how much more money you need to save. If you don’t mind doing a little more math, divide that amount by the number of weeks left before you’ll give gifts and you’ll know exactly how much you need to save each week.
3. Cut something for a little while
Once you know how much cash you’re trying to stash away, it’s up to you to figure out how to do it. Depending on how much you want to save and how tight your budget is, a few of the strategies below could help:
- Take a break from your daily latte
- Pack lunch instead of dining out
- Get rid of a premium cable channel or downgrade your packages until the holidays for some easy savings (with holiday travel and activities keeping you busy, you might not even miss it)
- Instead of going out to a movie with friends, invite them to your place and make some popcorn
- You can also host a game night for friends for low-cost fun – just ask each guest to bring a snack and you’ll have food handled too
- Get carryout for dinner less often – even the cost of fast-casual restaurants can add up quickly
4. Watch your money costs
Take a look at the money you spend on money and see if there are ways to save. For instance:
- If you pay a maintenance fee for your checking account, it could make sense to switch to a free one.
- If you’re paying a high interest rate on a credit card, consider a balance transfer to a card with a lower interest rate. Be smart about it though – many cards offer a low interest rate on balance transfers for a few months before a higher rate kicks in. If you plan to use this strategy, make sure to pay off the balance before the rate soars or you’ll be in the same boat as before.
- If you’re always paying crazy high ATM fees, consider opening a free account at a local bank convenient to your home or office.
5. Don’t crash and burn at crunch time
As the holidays really get close, there are a couple more things you can do to save. First of all, start shopping early so you have time to scope out good deals. That way, you won’t be tempted to throw your budget to the wind in a rush of panic when time is short and you still have tons of gifts to buy.
Another big opportunity is with wrapping.
- Don’t pay extra to have your gifts wrapped at the store. A little time and ingenuity can save you several dollars on each purchase.
- Sometimes there’s no cost at the register for a nice box or tissue paper if you do it yourself. Don’t turn down these free wrapping materials.
- When you actually buy wrapping materials, remember that although bags are easier, they also cost more. Default to gift wrap when possible and only buy bags for the most oddly shaped items.
- If you’re buying a gift online for someone who lives far away, do the math. Is it cheaper to pay to have it shipped to you, wrap it, and then pay for shipping again; or would it be more cost-effective to pay a few dollars for gift wrapping and ship directly to the recipient? The answer will depend on the cost of shipping and the cost of wrapping, so crunch your numbers.
- Think ahead to save for next year. After the holidays, holiday gift wrap, bags, cards and tags are deeply discounted so scooping them up is a great gift to your future, potentially cash-strapped self.
Another good tip for crunch time is to buy a few reasonably priced “good for anyone” gifts to have on hand. A box of chocolates, a bottle of generally appealing wine or a tin of seasonally flavored popcorn are all good choices. By having these at the ready, you won’t find yourself splurging when you’re in a gift-giving jam.
While this holiday season is probably at the forefront of your mind, a little preparation now can make next year’s holiday shopping exponentially easier. You can enroll in FAB&T’s 2017-2018 Christmas Club Program starting November 13th so that in 2018, you won’t even have to think about saving for the holidays. To learn more or join the Christmas Club, visit any one of the 21 FAB&T branches.