The holidays are nearly here, and you can feel the anticipation growing. The days are getting shorter – and colder. Decorations are popping up everywhere and the kid in you is totally ready to come out. Let’s face it…it’s exciting to surprise friends and family members with the perfect gift – the one you’re absolutely certain they’ll love. But remember, it’s also important to budget wisely – even when you are surrounded by those blockbuster sales and enticing ads. Here are some steps to help you achieve your gift-giving goals in December and still feel financially fit in January:
Check your current finances
Are you likely to see a cash windfall before December rolls around? Great! However, if (like most of us) you’re not, here’s one simple, painless step to take: set up a savings account specifically for holiday spending. It is an excellent way to cover the accumulated credit card and checking account debt.
Create a budget, estimating what you can afford for gifts, travel and other holiday spending by subtracting expenses from income. To ensure accuracy, differentiate fixed expenses like mortgage or rent, car payments and utilities from variable ones, such as food, entertainment and vacations.
If you have records from years past, it will help to review how much you previously spent on gifts. When you have decided on a dollar figure as your savings goal, divide that by the number of weeks left before the holidays to calculate how much to set aside each pay period.
Set up your savings account
Once your budget has been established, the next step is to set up an account and fund it. (Oh, and by the way: First Internet Bank offers free and interest-earning savings accounts that are ideal for growing holiday cash). If you already have direct deposit set up with your employer, it may be possible to select a specified amount from each paycheck — $25, $50 or whatever you decide to contribute to this account.
An automatic deduction will make it easier to meet your savings target; you won’t miss what you don’t see. You might also consider padding the account to cover other holiday-related outlays like decorations and dining out with family and friends.
Stay on track
The earlier you know what gifts you plan to buy, the sooner you can start monitoring prices and timing purchases to take advantage of those Black Friday and Cyber Monday sales. Using a credit card with cashback rewards (Like a First Internet Bank cashback credit card, for example) can at least offset a portion of your spending total. Finally, if you see your budget is going to fall short and still want to avoid incurring post-holiday debt, consider paring down your list or reducing what you spend on each present.
Here’s to enjoying the season, spending quality time with loved ones and truly making it “the most wonderful time of the year”. However you celebrate, remember to be smart and responsible with your holiday spending; it’s the best possible way to make the coming months merry, too.
