Published December 28, 2017.
Updated February 14, 2019.
You'll thank yourself later.
The holidays are over, and maybe you've settled back into your familiar routine.
But 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.
STCU member Martha Hokenson says saving year-round for holiday expenses is easier than it sounds. To start, 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.
By year-end, "you already have a fund to pay for holiday expenses v. whipping out the plastic,” Martha Hokenson says.
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," Hokenson 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 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.
Paying attention to prices throughout the year can make it easier to stick to your holiday budget. Keep an eye out for 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.
Taking practical, yearlong steps to budget and save might be the best gift you give yourself each December.
This year, be your own secret Santa!
In summary, to make the next holiday season easier on your wallet, do this:
- Create an honest holiday budget.
- Create 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.