To start, create an honest budget.
It’s time to savor the last of the holiday cheer, pack up the decorations, and get back to your familiar routine. Or maybe not.
The start of a new year is the perfect time to launch some new habits ― like saving ahead for the next holiday season. You’ll make the next holiday season easier on your budget.
Martha Hokenson, an STCU member, writes the “I’d Rather Be Reading” blog, offering lifestyle tips, product reviews, and household hacks. She says saving year-round for holiday expenses is easier than it sounds.
To start, just become the ant!
Becoming the ant
In an old fable, a grasshopper spends most of the year relaxing and sunbathing while an ant busies itself putting away food for the winter. Guess which one is caught off-guard when the first snowflake falls.
To become the ant, start by putting away a little each month, ideally through direct deposit or automatic account transfers. Some employers let you divide your direct-deposit paycheck into multiple accounts; otherwise, your credit union or bank should let you set up automatic transfers, along with separate savings accounts for various purposes.
Set up regular automatic deposits to a “holiday account” ― and don’t touch the money until the holiday season.
“Auto transfer is something I’ve done for years and years, even if you just set up a piggy bank and commit to dropping in a set amount of every paycheck,” she says. “By the time you get to the holidays, you already have that fund to pay for the holiday expenses versus whipping out the plastic.”
Make an honest budget
Even before you set up automatic transfers, draft a holiday budget for gifts and other expenses, such as food, travel, entertaining, decorations, and seasonal charitable donations.
Build in a little extra for unexpected expenses, like gift exchanges at work. Then divide the total over a year to determine how much to set aside every paycheck.
Be your own secret Santa.
- Create an honest holiday budget.
- Set up a holiday-only savings account and year-round automatic deposits.
- Look for sales well before the shopping season.
- Shop with a list. Avoid impulse buys.
- Don’t yield to pressure to overspend.
Paying attention to prices throughout the year can make it easier to stick to your holiday budget. Keep an eye out for post-Christmas sales and other bargains.
“If you get your wrapping paper and lights after Christmas while they’re on sale and then set them aside, you’re not out there doing that last-minute impulse shopping,” Hokenson says. “You see retailers offering special weekends or member appreciation days throughout the year, and you can sometimes find much better deals than on Black Friday.”
And you don’t necessarily need to wait until the shopping season to buy ingredients for holiday parties and feasts.
“A lot of grocery stores will start offering really deep discounts on baking items as early as September or October,” Hokenson says. “Stocking up on your baking items then means you have everything ready to go when December rolls around.”
Being price conscious also means recognizing where we might feel the “pressure to outspend” at the holidays.
“If there are lots of kids — lots of cousins, nieces and nephews — one thing that several families I know have done is agree to a price point for a gift, maybe $10 or $15,” she says. “And then everyone puts names into a hat and draws a name. It turns it into a fun game to see what creative gift you can get for a smaller price point.”
Taking these kinds of practical, yearlong steps to budget and save might just be the best gift you give yourself each December.