It’s hard to believe, but the holiday season is upon us and that means it’s time to start saving. Big time. Since, let’s face it, no one wants to go into the final months of the year with a low bank balance or having to put everything on credit. Don’t do it!
To get through the last quarter of the year without breaking the bank, you’ll need some solid strategy in place now. Trust us when we say planning now will ensure you can later enjoy your time stress-free with family and friends.
To be fair, you might be thinking, “It’s only October!” This is—at face value—true. But, if you think about how much you typically spend during the holidays (for our purposes, we’re counting Halloween), you’re likely spending a lot more and a lot more often.
Unless you’re being a Scrooge, a Grinch or a total “nope, not going,” type of person during these final months, you’ll likely incur a lot of expenses. The party invites and RSVPs will quickly add up. Your social life will kick into high gear. Everyone will want to get together for everything from Halloween to the company holiday party. You might also need to spend on travel arrangements for Thanksgiving (or, um food?). And let’s face it. There’s no gift-giving season quite like during the final months of the year.
So, how do you make it out with your wallet intact? The key lies in planning for a holiday savings fund. Here’s how to do it right.
How to start your holiday savings fund ASAP:
TBH, it’s never too early to save, but if you’re like us, you’re only just starting.
Determine how much you’re willing to spend
Yes—creating a budget for the season is the first step in this plan. Start by noting down all the major holidays, potential travel costs, company events and vacation time. Then, make a list of the people in your life you want to gift something to. Really streamline your list as much as possible. See who definitelygoes on the list and then make a list of your “would be great, if possible.” Then, do a quick online search to determine an average price point for the kind of gift you’ll want to purchase. Adding these totals up will be the start of your expected expenses for the season.
Secondly, you’ll want to add in other expenses that you’ll likely incur. For instance, if you want to wear a brand-new dress, heels, and get a blow-out for a certain event—budget in those items accordingly. Be honest with yourself here. Finally, create al list with a “general” budget for each major holiday. This will be your budget for miscellaneous expenses throughout the season. Think: Those pumpkin spice lattes you’re so fond of.
Do a quick assessment of your current subscriptions
Part one of saving is knowing where your money goes. We already know that spending on dining out and coffee quickly adds up (as many of our Scrimp City Challenge participants have learned). But, another more discreet way that we lose money regularly is through automated subscriptions and recurring bills.
Take some time and audit your most recent bank statements to see where you might be losing money without realizing it. If you can, freeze or cancel any unnecessary accounts. You can add the extra cash to your holiday savings fund without feeling the pinch.
Do a spending detox or a no-spend month
You can tell yourself to cut down on your spending as much as you want, but unless you actually do it, it remains just a lofty goal. One of the easier ways to follow through is to do a “no spend” week, weekend or (if you’re ambitious) a month. It works like this: Commit to not spending anything except what’s absolutely necessary during your “no spend challenge” days.
Set yourself up for a weekly savings challenge
Take out your calendar, planner or simply a piece of paper. Count down how many weeks you have till the end of the year and note along the way the big holidays and events you plan on celebrating. Then, for each week, write down a set amount you want to save. It can range from $40 to $100.
The point is, you vary the amount each week so that it’s not exactly always an event number. By the end of the time frame you set for your “savings challenge,” you’ll have saved enough to cover your holiday expenses. If you need some inspiration, consider starting your own version of the 52-week Savings Challenge. Start your savings small and add to each amount weekly. Or, you can try following along to a 35-day $635 savings challenge or the 12-week $900 savings challenge.
Automate your savings so you don’t think about it
The simplest and most effective way to save money regularly? Automate it. Set up your bank to make automatic transfers to a separate savings account. Chances are you won’t even notice the money being discreetly moved out of your checking. Automate it. “Let technology work for you,” Priya Malani, founding partner at STASH Wealth, previously told Girlboss. “Besides, none of us needs another thing on our to-do list.”
Move your funds into another account so you’re not tempted
A good way to make sure you don’t dip into your savings before you absolutely need to is create some barriers between you and your money. These can be both practical or psychological tricks you play on yourself. Move your funds into a separate savings account at another bank. Make it so there’s a few days between a transfer and when the money is in your hands. Name the other account so you’re continuously reminded of what it’s for.
Monitor your progress in a motivating fashion
Don’t forget to celebrate your accomplishments along the way, either! If you like noting things by hand, create a savings goal trackers in your bullet journal. Draw different towers with boxes for set amounts you save. Then, fill in and color each as you add in savings.
The goal is to visually remind yourself of your progress. But if bullet journaling isn’t for you, consider printing out photos of past events or putting up visual cues of the holidays and how you plan to spend the fund. It will be harder to dip into your savings ahead of time if you’re reminded of what you’re saving for.
If you must use a credit card, look for ones with the best rewards
Use your credit cards if you know you can absolutely afford to pay off your credit card charges this month. If, say, you need to book some travel and you’ve managed to build up your holiday savings fund, consider a travel rewards card. You can charge it to your card—but still pay it off immediately to avoid interest fees. Any rewards points or discounts you get could help you save on other gifts and experiences later.