Do you wait until the last minute to start buying gifts?
Do you get carried away with spending during the holidays because you love seeing the joy on your loved ones faces when they open your gift?
Does your list of gifts for friends, family, and coworkers cause you to become overly stressed?
Do you tell yourself that you’ll just pay off the credit card in January (or later) so you can splurge on the perfect gift, extensive travel, or delicious 5-course meal?
If you answered yes to any of these questions, you are probably a holiday over spender.
The holiday season is a time filled with joy, happiness, and love while we create wonderful memories with those we’re closest with. However, for many, it can also be a time of financial strain if there is not a proper plan set in place. By choosing to save early, you can feel confident in your finances and enjoy all the holiday festivities without the burden of financial stress.
Here are five reasons to start saving now for the holiday season.
Avoid Last-Minute Debt
In 2023, Forbes did a study on holiday spending trends in America and found that approximately 58% of Americans used credit cards to pay for Thanksgiving expenses. In addition, the study shows 52% of Americans relied on credit cards to pay for their holiday gifts, and 33% utilized Buy Now, Pay Later services.
By choosing to start saving early, you can pay for your holiday gifts and avoid accumulating last-minute debt.
Establish a Budget
Look back at your statements to see how much you spent over the holidays last year. This is a good starting point to help you gain a better understanding of what holiday spending may look like for you. From there, you can start to establish a realistic budget that will help you to say out of debt during the holidays.
Prioritize your Holiday Expenses
Like any budget, you may have to cut non-essential expenses to reach your savings goal. Identify places in your lifestyle where you could temporarily cut back on spending to save more for holiday necessities.
In addition to identifying non-essential spending, this may also apply to gift giving. Make a list of the important people in your life that you are sure to be purchasing a gift for. Before adding people to that list, ask yourself if it is necessary to get them something. This can keep you from feeling the need to buy gifts for everyone in your life.
Create a Dedicated Savings Account
Our Holiday Club account is the perfect solution to helping you get a jump start on holiday savings. Opening a separate savings account for your holiday fund, will help you avoid using your savings for other purposes. To ensure your holiday savings account grows consistently, you can set up an automatic deposit for a portion of your paycheck to be distributed into the account.
There’s something special about a DIY (do-it-yourself) gift that everyone loves. For this upcoming holiday season, consider creating DIY, handmade, or personalized gifts that offer a unique touch and allows you to save a little bit of money. If you’re not a crafty person, try focusing on more personalized gifts such as experiences. These can be lower-cost and can be just as valuable as a physical gift due to getting to spend more time with loved ones.
This year don’t get swept up in the excitement of the holiday season that you forget to plan for your financial spending. Beginning to save now for the holidays is a smart financial strategy that can provide you a holiday season with less stress and more freedom.