These days, a lot of people’s feel more dread about the winter holidays than enthusiasm. That’s because the winter holidays are expensive, and thanks to inflation, more and more people are beginning to wonder how they can afford to buy gifts, decorations and food without burying themselves in debt.
Fortunately, there’s a way to pay for the holiday season without going into debt (or at least reducing how much debt you’ll have). It’s called a holiday savings plan, and once you have one set up, you’ll be amazed at how much it can help you cover holiday costs.
Set a Goal
The first step in any good holiday savings plan is to set a goal. Take some time and figure out how much you’ll want to spend over the holiday season this year. You’ll more than likely want to have money for gifts, but you should also think about how much you’ll want to spend on travelling, food and even decorations. Once you’ve listed your expenses, add them up to get the amount you’ll need to save.
Coincidentally, coming up with a specific amount to save is the first step in making a SMART financial goal, in other words a goal that is Specific, Measurable, Attainable, Realistic and Time-Bound. You probably won’t be surprised to learn that your next task will be to complete the rest of the steps to make your goal SMART.
Make a Gift List
While you’re coming up with an amount to save, you might also want to find out what presents everyone on your gift list would like. Once you know what they want, you can use that information to help generate your savings goal. You can also start looking for sales on the gifts in question to help you save money.
Obviously, the earlier you get started, the better chance you'll have to find gifts when they're on sale. Of course, if you start too early there's a good chance that the people on your gift list haven't even thought of making a wish list. One way to get around this is to keep a list on you, like the notebook app most smartphones have, where you can write down any ideas that come to mind while talking with the people on your list.
Pick a Savings Account
Once you’ve answered the question “How much should I save for the holidays?” you’re ready for the next question—what is the best holiday savings account?
There’s nothing wrong with a traditional savings account, but you should be aware that there are other types of accounts you may want to consider. For instance, could open a club savings account, which won’t let you access the money you deposit in it until a specific date. This reduces the likelihood of you dipping into the account for other expenses, and they’re ideal if you’ve set up your holiday savings plan several months in advance.
If you’re feeling lucky, you might also want to consider a WINcentive savings account. When you regularly save money in this account, you become eligible to win a cash prize each month, as well as every quarter and every year. Even if you don’t win, you’ll still have saved up a lot of money for the holidays.
Budget Your Savings
Once you’ve set up your holiday savings account, all you need to do is start regularly depositing money in it. The best way to do that? Make a new category in your budget, complete with the amount you’ll save each month.
After you’ve created the new category, you’ll need to adjust your budget. Go through the rest of your budget categories and reduce them until you’ve covered the amount you want to put into your holiday savings account. Doing this not only makes it more likely you’ll stick with your holiday savings plan—it also takes away the stress of wondering if the money you’re saving should be going to some more pressing expense.
Save for the Holidays With First Alliance Credit Union
The holidays can be expensive, but a good holiday savings plan can help lessen the blow. If you start early enough, you can even cover the holiday expenses without having to go into debt. All you need to do is figure out how much you’ll need to save, select a savings account that fits your needs and regularly put money into your account until the holidays arrive.
If you want to put your holiday savings plan into action, become a member of First Alliance Credit Union today. We offer several different types of savings accounts you can use to store your holiday funds, as well as an online banking platform that will let you keep an eye on how quickly your holiday fund is growing.