Like clockwork, the holiday season is around the corner. For some, the giving season is a time for financial stress, especially if they’re not prepared. Fortunately, there’s still time. If you start planning now, you can face the holidays with the funds you need and more peace of mind. In this blog, we’ll discuss budgeting for the holidays. By planning strategically, you can save and spend smarter this holiday season and next.
Plan for Holiday Spending
Start your planning for the holidays by identifying the things that you want to do, how much they may cost and how much you’ll need to save to afford them. Here are a few key expenses you should include when preparing your holiday budget.
- Travel Costs: Celebrating the holidays with family and friends usually involves traveling. Travel expenses can take up a high percentage of your holiday budget, especially if you have a large family. Things such as airfare, baggage, gas, hotel stays and road tolls can add up for a family of four.
- Gifts: Buying gifts can also strain your budget. The best way to approach this is to make a list with the recipients’ names and the amount you want to spend on a gift for each person. Add it all up to see what your gift budget is and then determine ways to save.
- Hosting: The holidays are also a time when you may want to host family and friends for dinner or other occasions. Consider how much it will cost to provide food, drinks and entertainment and budget accordingly.
- Food and Entertainment: Don’t forget to set aside money for dining out and entertainment. Lunch and dinner dates, after-work gatherings, holiday shows and other events can leave a dent in your finances.
Creating a budget specifically for the holidays gives you a realistic view of the estimated amount you’ll need to spend, as well as motivation to start saving. It will also help you avoid any holiday impulse buying, according to Bankrate.com.
How To Fund Your Holiday Shopping
Once you have a holiday budget in mind, you’ll need a way to fund it. Ideally, you should use your savings, but if that’s not an option, consider using credit or getting a loan. Let’s explore those options.
- Savings: Setting aside money each month or payday is the best way to save for the holidays. The most convenient method is to set up automatic payroll deposits to a savings account dedicated to your holiday spending. For example, Travis Credit Union Target Savings account lets you save for the holidays or other short- or long-term goals.
- Credit Card or Loan: If you don’t have enough savings for the holidays, you may want to consider borrowing the funds using a loan or credit card. Using credit can be a good move if you repay the money on time. It can help you build up your credit score, which is important if you want to buy a home or car. Just remember to make your payments on time and pay off the balance as soon as possible to demonstrate you can handle credit responsibly.
Start Early To Avoid Overspending
Another tip to save money is to give yourself as much time as possible and not wait until the last minute for your shopping. Starting early can help alleviate some of the stress and strain on your income. Consider starting on your gifts during the summer and fall.
For example, keep an eye out for end-of-summer and pre-holiday sales. Nowadays, retailers are holding Black Friday sales earlier than the day after Thanksgiving, so take advantage of any discounts that fit your list, according to U.S. News & World Report. Another reason to shop early is to avoid any supply chain issues that may delay an online order.
Sticking to your budget and shopping early lets you avoid the stress and crowds during the holiday season. It also puts you in a better position to enjoy the holidays.
How Travis Credit Union Can Help
Travis Credit union is focused on your financial wellness and can help you prepare for the holidays and more. Our Knowledge Base platform offers free financial education courses that can help you to better plan, save, spend and borrow.
TCU also offers Money Market Accounts, Certificate Accounts and Savings Accounts so you can save money for the holidays, as well as longer-term goals. If you need to borrow, Travis offers credit card and personal loan products. Get started by checking to see if you have any pre-qualified offers waiting for you at TCU. Visit Traviscu.org today to see how Travis Credit Union can help you prepare for the holiday season.