Need Cash for the Holidays? Here’s How to Budget and Save
The holiday season might just be your favorite time of the year — a nice break from stress, work and other problems. You can plan a family vacation, holiday parties, and come up with a decorating plan for your house. But unfortunately, the holiday season is also an expensive time. So if you don’t have a lot of disposable cash, now’s the time to start planning.
Here are six tips to help you start preparing for the holidays.
1. Set a budget based on what you can afford
Before you can start saving for the holidays, you need to create a budget and decide how much you’re going to spend. Some people make the mistake of going overboard and they end up burning through their savings accounts and getting into credit card debt. There’s a better way.
You need to be realistic and assess what you can afford beforehand. How much do you plan to spend on holiday parties? How much do you plan to spend on gifts? Whatever amount you decide to spend, divide this figure by the number of months until it’s time to start shopping. This helps you determine how much to save monthly. So if you plan to spend $700 during the holidays, and you plan to start shopping in two months, you need to save $350 a month.
2. Cash in your credit card reward points
If you have a rewards credit card or a cash back credit card, and you’ve been accumulating points over the years, now might be as good a time as ever to redeem your rewards.
Letting reward points accumulate is one of the best ways to buy gifts without going into your pocket. You might have enough reward points to request $5 or $10 gift cards for some of your friends or relatives, or you might be able to request a check and put this money toward your holiday shopping budget.
3. Save money with your bank
It might come as a shock, but your personal bank may offer programs to help you save for the holiday season. Some banks and credit unions offer a holiday savings club account. You can set up automatic transfers from your checking account into this account every week or biweekly. Transferring as little as $5, $10 or $20 a week adds up quickly, and in most cases, you won’t miss the money.
These accounts work because you can’t touch the money until the holiday season. Also, your bank may offer other provisions to help you save. Some banks have a round-up program where they’ll round up all purchases to the nearest dollar and deposit the difference into your savings account. Additionally, Wells Fargo has its Way2Save program. For every debit card transaction, the bank transfers a dollar from your checking account into your Way2Save account.
4. Start shopping now
You don’t have to wait until Black Friday to start shopping for the holidays. Obviously, you can find some amazing deals on this day and save money, but retailers also have deals at other times of the year. You might find year-long deals on eBay or Groupon. Occasionally scour these sites to see if you can score discounts on items that’ll make excellent holiday gifts.
5. Cut back wherever you can
If you’ve been thinking about reducing your expenditures, now’s a good time to start. Ditching your cable service might save you up to $100 a month or more, and you can also save by reevaluating your insurance needs and comparing providers.
6. De-clutter your life
If you need to drum up extra cash for the holiday season, de-cluttering your life and getting rid of items you don’t need can generate cash. For example, you might have old gold jewelry lying around. Sell these items to a gold buyer and put a few hundred dollars in your pocket, depending on the value. You can go through your closet and sell some of your high-end fashions for cash, or de-clutter your basement, attic and garage and turn your trash into cash.
The holiday season can be an expensive time, and unfortunately, some people deal with post-holiday financial blues. With a careful plan and a reasonable budget, you can keep your spending within a reasonable range and avoid complicating your financial life.
