Saving Up for the Holidays

It is officially November, which means it is the beginning of the most wonderful time of the year — the holiday season! It is also the season of giving, and while you want to spread the holiday cheer, showering your loved ones with gifts in the week leading up to the holidays is not easy on the wallet. In order to do this without breaking the bank, it is a good idea to start saving up at least a month or two in advance so you will have some wiggle room in your budget. Here are some money-saving tips to try as we approach the holidays:

• Set a Budget

As with every financial decision or purchase, you will need to assess your budget, income, and savings to determine how much to spend on gifts. From there, set a holiday spending limit (around 1 to 1.5 percent of your annual income is recommended). Remember that this amount will include not only gifts, but it should also include any food, gift wrapping items, travel expenses, and decorations as well. Now that you know the amount of money you will be spending, make a list of all the people you need to buy for and set limits for each person. Divvying up your money and setting limits will save you from overspending.

• Dedicate a Place to Put the Funds

Because you are saving up for something in particular, it may be helpful to separate your holiday savings from your main savings or checking accounts. Whether you store cash in a special place in your home or open a separate account with your bank, keeping your holiday fund in a different spot will ensure that you do not dip into it before you need to.

• Save the Money

You have an amount you need to save, a place to put it, and only a few months to save. Some may choose to borrow from their main savings account to help, but this may not be an option for others who need to come up with all the gift-giving money outright. For those individuals, it is time to get creative and find ways to fill up your holiday fund to the amount you set. Try a “no-spend” week or month. Set a goal to not go to restaurants and cook more at home instead. Use up all your gift wrapping materials before you buy new ones. Sell furniture, gadgets, clothes, and other items you do not use anymore. Use coupons to cut down on spendings for groceries and toiletries. There are endless possibilities to reduce spending and fill that holiday account with money. If you are on Pinterest, check out our “Money Tips” board for more inspiration.

Relieve Financial Stress This Holiday Season

The holiday season is supposed to be enjoyable and relaxing — not stressful. Instead of waiting until the last minute, saving ahead and budgeting can help tremendously when it gets down to the wire. You will be able to give generously to your family and friends without feeling guilty about your spending, thereby saving yourself from financial stress. Happy holidays!