Do This Now if You Haven’t Started Saving for the Holiday Season Yet

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If you haven’t started saving for the holidays yet, now is the time so you don’t end up in debt to buy gifts and entertain. Here are the steps you need to take. 

The holiday season is approaching faster than you might think. And that means that we are coming upon one of the most expensive times of the year.

If you haven’t yet begun preparing for how you’re going to cover costs this festive season, there’s one thing you should do today so you can make sure you are ready when the holidays hit your household.

Automate contributions to your holiday savings account today

According to a recent study from PwC, consumers are planning to spend more money on holiday expenses this year than last year. Specifically, spending is expected to be around 7% higher, with consumers intending to spend an average of $1,530 for gifts, entertainment, and travel-related expenses.

That’s a lot of money, and it can be impossible to come up with all of that cash at one time. Sadly, this means many people will find themselves reaching for their credit cards and running up a balance they cannot afford to pay back.

That’s a big problem. If you charge $1,530 on your credit cards and don’t have the money in your checking account to pay it off when the statement comes, you’re going to get stuck with interest charges. And interest can really add up.

If you charge $1,530 on a credit card at 18% interest and make minimum payments equal to interest plus 1% of your balance, you could end up not being free of your holiday debt for a total of 155 months and would pay $1,718.16 in interest.

You don’t want to do that. So, to avoid it, you need to get started today in making sure you have enough money for when the holidays arrive. You can do that by opening a high-yield savings account, deciding how much to contribute to have your desired amount by the holidays, and automating your contributions. That means having the funds come directly out of your account on payday and go into savings.

Will you be ready for the holiday season?

The arrival of the holiday season shouldn’t come as a surprise. You know when the festive events begin. So you have the opportunity to make sure you are ready for it by getting started now. Here’s what you should do:

Calculate how much you plan to spend. You don’t have to shell out the $1,530 the average American will. You can look at the cost of airline tickets to travel home, make a list of people you’re buying for and your budget for each, and check your credit card statements from last year to estimate other expenses. Add up the amount you think you’ll need for the entire holiday season to get an idea of what you need to save.Divide that amount by the time left. If you’ve decided you want to save $1,000 by December and you’re getting started in October, you have two months to save your $1,000 so you’d need to contribute $500 a month to your savings account. Work your budget to figure out where the funds will come from. Can you make big spending cuts in some areas? Remember, it’s temporary, you won’t have to sacrifice forever. Or perhaps you can take some extra overtime or jump into a side hustle for the next two months to save enough. Automate your contributions. Once you know where the money is coming from and how much you need, set up automatic contributions of your desired amount into a high-yield savings account earmarked for the holidays.

If you take these steps today, you may be able to put aside all the money you’ll need to enjoy this upcoming holiday season.

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