It’s only August and I’m bringing up the holidays. I must be crazy, right? While the holiday season doesn’t really kick into gear for another three and a half months or so, you know as well as I do that it will be here before you know it. Late November will roll around and you’ll be wondering how the time has gone by so fast. Even with a number of months to go, you can help reduce your holiday stress levels if you take the time to save a little money now and start planning ahead. You don’t want to be in a position where Santa isn’t coming this year.
Start Saving Money Now
Hopefully by now you’ve established an emergency fund and have begun paying down that debt, but what about setting aside money for the upcoming holiday season? How do you plan on paying for all the gifts, travel, and food? If you’re like most people, the holidays will come and little planning will have gone into how much money it will all cost. This leads to overspending, tapping into funds meant for something else, or just putting it all on a credit card to be dealt with later.
With everything seeming to be rising in cost lately, there is more reason than ever to save a little bit of money. The first thing you’ll want to do is set up a holiday fund. This money should be set aside specifically for holiday expenses. If you’re good at budgeting and fairly disciplined, you can do this within your existing savings account, but for most people, I’d recommend opening a new one so that you can keep this money separate. There are many different options for a savings, but you can get a rate of 3.75% in a WaMu savings, or open a savings account in under five minutes with no fees, no minimums and FDIC insurance at ING Direct.
Once you have a place to save money, you’ll want to set up some regular contributions. Obviously, trying to come up with large chunks of money is more difficult than saving a little bit over time, so that is probably the easier way to save. Consider this. If you started this week by saving just $20 per week, you’d have about $360 (not counting interest) saved by Christmas week. If you’re married and had your spouse also save $20 per week, you would easily accumulate over $700. Whether this money would be used for travel or gifts, in either case it would certainly lessen the burden on your budget or credit cards come December.
Prepare Your Gift List
While there’s certainly some new products to be released as we get closer to the holiday season, you probably already have a pretty good idea of what type of gifts to buy the people on your list. So, you can begin listening for hints on what to buy and start putting together a list now. One of the most stressful parts of the holidays can be the last-minute gift shopping. You end up fighting crowds, possibly unable to find what you’re looking for, and it is just not much fun. By preparing your list a month or two in advance, you can begin to get your shopping done earlier so that you can avoid those last-minute shopping trips.
Begin Looking at Travel Options
If your holiday travels will require air travel, the sooner you can begin looking at fares and flights, the better. While you may not want to purchase your tickets right now, you can at least get an idea of what the current fares are and what the flight schedules area so you can plan your trip. There is nothing worse than finding out the only available flight won’t get you to where you want to be in time, or end up with a layover, so begin looking at schedules now.
Also, by looking at fares now, you’ll have a good idea of what a good deal is. You can set up fare alerts on a number of websites, or simply check the site every week or two to see if there are any changes in price. This gives you plenty of time to adjust your budget to make sure you have set aside enough money for the travel. But don’t wait too long, as it isn’t worth saving $20 if it is going to put you on a non-direct flight or get you to your location too early or late because everything is booked.
A Little Bit Goes a Long Way
As you can see, preparing for the holidays in August isn’t so bad. You don’t have to get in the holiday spirit while most people are still taking summer vacations and the kids are just getting back to school, but taking a few small steps today can yield huge rewards later this year. Saving a few bucks a week will help your budget, and planning for gifts or travel in the coming weeks and months will lead to a stress-free holiday season. Well, maybe not stress-free. I don’t have any tips on how to cope with the relatives, sorry.
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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.