Whether you celebrate Christmas, Hanukkah, Kwanza, Chalica, or another holiday that falls at the end of the year, you probably have to save up in order to pay for the food, gifts, and travel that comes with it. The various December holidays are many months away, so most of us are probably not thinking about saving or planning right now.
Picking out the perfect gifts is great, but waiting until the last minute can be exhausting in addition to being more expensive. Holiday spending often gets out of hand and adds up quickly; budgets fly out the window in the midst of holiday cheer. Your best bet in order to have enough money saved is to start saving right now. Yes, now — in February. Just think of the cold weather as an easy reminder of what it will feel like outside when next December comes. Here is a list of ways you can prepare for the holiday season starting right now.
1. Create a Budget
It can be tricky to plan your holiday budget nine or ten months ahead, but if you can set the time aside, you will be glad you did. Even if you don’t know how much you will spend, you can make an educated guess based on how much you spent last year. Once you come up with a goal budget, you will know how much you need to spend each month.
If you need help starting, consider who you will be buying for. Many people buy presents for family members, teachers, coworkers or bosses, some friends, and so on. Others tip people who perform regular services for them (mail carriers, babysitters, etc.) Once you know who you want to buy for, you can determine how much you want to spend on each person. If you keep track on a chart, you can update your spending once you purchase the actual gifts. You can also check out this Holiday Budget Calendar to determine how much of your income you can safely use toward holiday gifts.
2. Set Aside a Specific Amount Each Month
Open a bank account solely for holiday expenses so that you can keep track of your savings and avoid accidental spending. After you determine your ideal budget and you know how much you need to save each month, you can start the actual saving. If your company and bank offer a way to set up automatic deductions from your paychecks, set that up immediately. Setting aside a specific amount each month will help you avoid putting gifts on your credit card or dipping into your emergency fund, which you should avoid completely.
The holidays come with a lot of pressure to spend and to purchase gifts, so if you find that your salary doesn’t offer you as much extra money as you would like to spend on the holidays, you may need to rethink your budget. Your relatives might be surprised if you don’t buy them anything, but that fleeting disappointment will be easier to bear than going into debt that you can’t easily pay back.
3. Consider Purchasing Some Gifts Now
Holiday prices are tricky because many stores lower their prices or offer big sales. Determining whether or not you will save money by purchasing a gift early will depend on the particular gift. Despite the many sales that stores offer in November and December, not all items are a better deal at the end of the year. If you want to purchase clothes to give as gifts for next winter, you are much better off buying them in the next month or two since winter is nearly over and many stores will have huge sales at the end of the season. Often, fad gifts are difficult to obtain during the holidays because of the demand, and that also can raise the price, so purchasing them early is a good idea.
If you received a gift last year that you didn’t like or won’t use, consider re-gifting it. While some people might argue that this is tacky, if you know someone who would really enjoy it (and who has no possibility of finding out you re-gifted), then it is a great way to save some money and make someone else happy.
4. Do Your Holiday Travel Planning Soon
One way you can anticipate costs is of your anticipated travel is by using a Travel Budget Calculator. Like budgeting for gifts, you should save for travel ahead of time. This is particularly true if you are planning to fly somewhere, or you are hoping to take a vacation. According to CheapAir.com, the best time to purchase tickets for domestic flights is 49 days in advance. This number is based on analysis of 560 million searches, but that number isn’t magic. Your ticket prices will also depend on the time of the year, the day of the week, the market itself, and perhaps other factors as well.
Of course, if you are planning to travel at the end of 2014, then you probably don’t want to purchase your tickets right now. But you can look at prices for flights to your intended destination now, and start saving for your holiday traveling (keep in mind that fares usually go up near the holidays.) Go ahead and put a reminder on your phone now, so as the ideal purchasing time gets closer, you will know.
5. Plan Ahead When Purchasing Food and Decorations
Like winter clothes that go on sale in Spring, holiday decorations go on sale at the end of the holidays. Even though it’s been a few months, some stores still have sales. Overstock.com has Christmas decorations on sale right now. Another easy way to find holiday decorations is by checking garage sales or Craigslist. If you are looking for a menorah or other holiday item, you may find one at a garage sale in the middle of the summer. If you have kids, you also can make crafts all year long as a fun art project. You can then decorate your home with these, and even give them as gifts.
Although many holiday foods will not keep all year, some nonperishable items can be bought now and over the next few months. Canned vegetables, canned fruits for pies or desserts, and stuffing mixes can be purchased quite a few months early.
As we get closer to the actual holiday season, there will be many more ways to save. Consider making gifts or baking presents. If you often purchase gift cards, shop around. Some companies offer deals on gift cards (spend $50 and get $10 free, etc.), and other stores will offer a free item if you purchase a specific other item. If you have present recipients that live outside of town and you have to ship their presents, consider using websites that offer free shipping with a minimum purchase, like Amazon. During the 2013 holiday season, consumers spent $42.75 billion dollars on online purchases. If that’s you this winter, you might as well get free shipping.