It is never too early to start saving for the holidays especially as it is just around the corner. You will start to hear Christmas songs around you and establishments preparing for it. After the Halloween and Black Friday Sale, Christmas is up next. This can be either be a stressful event for you or an enjoyable one depending on how you prepared for it.
You might still remember the debt hangover you had early in the year and cold sweat start running down your forehead. This is something you want to avoid at all costs and that is why you need to seriously start saving for your holiday expenses. Failing to plan for the expenses is planning to fail with your finances and you don’t want that late in the year.
To put this in perspective, the season is about family and having a great time with the people you love and being thankful for everything you have. That would be quite difficult if you know that you are going into debt just to celebrate. It might even undermine the whole idea of the season. Rather than being happy, you could feel sad and depressed knowing fully well what awaits you once the bill comes in.
With these in mind, it is a good idea to start saving for the holidays. More than being able to make the people that matter to you happy, you also stay away from debt. That being said, here are a few things to look into as you prepare for the holiday season. Read through and try to find what will work for you based on your lifestyle.
You do not want to max out your credit cards for gifts
One of the possible scenarios that could happen when you fail to start saving for the holiday expenses early is maxing out your cards. As Christmas draws near and in the absence of a holiday fund, there is a big chance that you would simply rely on convenience and the next best thing – os so you think. Whipping out your credit cards and maxing them out for the holidays can land you in a heap of trouble.
For one, the total amount due at the end of the month could be more than what you can pay in full. Once you fail to settle the entire amount and simply send in the minimum payment required to keep you up to date, your problems will start. For one, the interest, fees, and other charges could start to kick in. This means that your succeeding payments will be broken down in such a way that you pay less in principal amount and more on interests. Over time, you would be paying a huge chunk of your payments on charges rather than the actual amount of the item you bought.
Start saving for the holidays so you do not end up binge shopping
Another possibility that could happen when you are unable to prepare for the expenses that Christmas brings is going out and binge shopping. With the help of your credit card, you can easily go from one shop to another buying gifts and presents for other people and even for yourself. Not knowing that you are already racking up some serious debt total.
What is worse, you might dip from other places to fund your holiday shopping. You might interpret this as an emergency situation and think of using a part of your reserve funds. Worse, you might even withdraw some funds from your retirement money. Not only will you lose money on potential interest earnings, you might get slapped with some withdrawal fees.
The National Retail Federation cited that in 2016, millions of people started holiday shopping early. This means that there are a lot of people shopping early. Start saving for the holidays if you ever find yourself doing the same thing. This will help guide you and make you realize who you are buying for and what budget you have for each.
You do not want to overlook gifts for important people
One of the many problems you might have when the holidays come around is realizing that you missed buying a gift for someone. It could be your sibling or niece that will be visiting over the holidays or a good friend whom you will be meeting up with. It might even be for a colleague that has helped you during the past year. This is why you need to start saving early so you get to put together your list early. The sooner you have that on hand, the lower the chances that you forget someone important in your life.
You do not want to start the new year in the red
This is one of the biggest reasons why you need to start saving for the holidays early on. As you save the money, you are able to set aside the budget for your shopping needs. This prevents you from either charging everything on credit or having to dip into other funds to supplement your holiday expenses. Either way, having a budget prevents you from getting in debt now and having a good start to the new year.
Experian shared that in 2016, American consumers carried over more than $5,000 in credit card debt balance. No matter how you look at it, it is not always a pretty sight to start the new year operating in the red. Having a holiday budget could help you either stay away from debt in the new year or at least lower it down to manageable levels.
How to save for the holidays
Now that you have an idea why you need to start saving for the holidays, here are a few ideas to do exactly just that.
Create a list
The first step you need to make is to create that master list of all the people you want to give gifts to. You can start from your immediate families like your husband or wife and kids. You can then put in your parents, siblings, grandparents, and other close relatives. Don’t forget your close friends and even your colleagues.
After writing down the list of names of people you would be giving gifts to, the next thing is the budget. It would be a good idea to assign amounts per person depending on what you intend to get them. WIth this, you can simply total the amount to have an idea what your Christmas budget will be for gifts. This way, you can start saving up for it.
This approach works best when you are trying to keep track of your bills. However, it can also help you monitor your holiday savings. As you already have an idea how much you need in total and even per person, you can set the amount aside using an envelope. One of the things it does is it protects the money from being unnecessarily spent on frivolous expenses. This approach also helps you monitor the amount you have saved up leading to the holidays. It lets you know how much you have and if you have to double up on saving up.
Gift your skill
There are times when you might be coming up short on your fund and it might be a good idea to look at your hobbies and skill as an alternative for gifts. You can give your photography skill and offer to conduct a photo shoot for their family. You can even bake special cakes or cookies for them for the holidays. They can even send that out as gifts themselves.
There are a lot of reasons why you need to start saving for the holidays and doing so will help you prepare for it and manage your finances as well before the year ends.