By Ayesha Haider, BA, MBA, AFC© Candidate, FINRA Military Spouse Fellow For most of us, receiving a tax refund is a...
5 Reasons to Start a Holiday Savings Early
Before you know it, the holidays will be here. While the holidays are a fun time spent with loved ones, it can also cause money-related stress. Here are five great reasons on how to reduce the stress by starting a holiday savings early.
You’ll Save More Money
Many people may prefer to wait until it’s time to go shopping before they start thinking about the money they’ll spend on gifts. However, a smart money choice would be to do the opposite and start saving long before you actually head to the stores. The reason? You’ll save more money. If you begin with just $25 extra dollars per week starting in late October, you will save $200 by mid-December.
It’ll be Easier on Your Finances
Starting your holiday savings early makes it easier on your finances in the long-run. If your goal is to have $500 by mid-December, calculate the number of weeks left until the holiday and divide that by your target goal. If you start saving 10 weeks early, it will be easier to set aside $50 per week than it will be to come up with $500 when you go shopping. Setting a predetermined amount and length of time to save helps you pay bills and makes shopping a little more manageable.
You Won’t Rack Up Credit Card Debt
While there are definitely benefits to using credit cards, you don’t want to rack up a huge amount of debt on a high-interest credit card. Otherwise, you’ll be paying it off throughout the following year. Starting a holiday savings early minimizes credit card debt when you go gift shopping. Using one with cash back or reward points, followed by paying off purchases with the money you saved becomes a win-win situation.
You Will Know What You Can Afford
By saving early instead of relying on your plastic, you’ll know what you can realistically spend on gifts. It’s better to have a clear picture ahead of time than when you’re scrambling to come up with the perfect gift in December. By knowing exactly how much you can save realistically, you can rethink your gift list. If you just have to have a certain item, saving early can put you in the right frame of mind to watch store ads for deals, compare prices online, and use coupons.
You Can Make Changes in Time
One great side-effect of opening a holiday savings earlier in the year is that you are forced to take a look at your budget. Not only will you come up with a realistic figure of what you can afford, but you’ll see if you’re spending money in areas that are not necessary. For example, if you have subscriptions to things and services that you don’t have the time to use, go back and see how much they are costing you. It would be better to have that money in your pocket. Also, by saving early, you’ll know if you could benefit from a temporary holiday job. Not only will you be able to earn some extra cash for the holidays, most stores offer employees discounts on goods and services that can be used towards gifts on your list.
By starting a holiday savings early this year, you can start a habit that will allow you to effortlessly make changes ahead of schedule. With little changes, you can focus more on the spirit of the holidays and less about finances.