With this gorgeous summer weather, it’s hard to imagine that the holiday season is right around the corner. While we may not be ready to think of winter, one thing you may want to start thinking about (if you haven’t already), is how to plan for holiday gift-giving.According to the National Retail Federation, the average shopper spent $1,007 during the 2018 winter holiday season. Nearly half (46%) of those purchases were made using a credit card.
There are plenty of great reasons to use a credit card for holiday purchases, such as the ability to earn bonus points, purchase protection and in some instances extended warranty coverage. But far too many of us carry that credit card debt after making the purchase, paying more in interest, ultimately making it harder for us to reach our financial goals.
The good news is you don’t have to wait until the leaves have fallen or your neighbors start calling “dibs” to tackle holiday spending. By following these three steps, you can put a plan in place to help you better prepare to spread the holiday cheer!
1) Know what you spent last year
Take some time to review past account statements or receipts to get a good idea of what you spent last year. This will help give you a savings target to aim for this year.
Don’t freak out – it’s not likely that you’ll be able to save the entire amount between now and the holidays. Instead, divide the total number by 12 to come up with a more realistic monthly savings target. Focus on hitting that number every month for the rest of the year.
2) Make saving as easy as possible
If you don’t already have one, a savings account is a great way to set funds aside for future use. Almost all institutions will allow you to setup an “automatic” transfer from your checking account to your savings, to make it even easier. First Financial even offers a holiday savings account specifically for this purpose.
Do your best not to dip into these funds unless they’re for holiday gifts. If the unexpected occurs and you must use the funds, try your best to keep your savings plan in place. Before you know it, you’ll be rebuilding that balance and back on track towards a better financial future!
3) Give yourself a raise
OK, so most of us can’t just increase our paycheck with the snap of a finger, but we all can take a good hard look at how we’re spending it.
Take a look at recurring expenses, they have a sneaky way of adding up and if unchecked, often increase without us realizing. Think trial memberships, auto-subscriptions, and other similar conveniences.
Are you really getting the benefit of the service? Or could you go without it? Many subscriptions services now give you the ability to “pause” the membership before cancelling to get a better idea of how it would impact you. You may just be able to pause throughout the holiday season to help turbocharge your savings!
No matter your ability to earn, save, or spend – the holiday season is meant to be a time of joy spent with our loved ones. By taking small steps to prepare for the expenses today, you can chip away at the stress associated with the holiday “sticker shock” and give yourself one of the best possible gifts: peace of mind.