Time to Start Saving for the Holidays – So You Don’t Blow Your Budget!

by Sophia Bera on August 7, 2013

August is here and while you’re busy grilling, swimming, and enjoying the great outdoors, I have a feeling you’re not thinking the holidays, however, now is the perfect time to start saving!  Why?  Because if you start now, you’ll have five months to set aside money for holiday shopping.  By doing a little planning now, you can avoid overspending in December.   Trust me: you’ll thank me in January.

Create a Holiday Budget

Figure out how much you’d like to contribute towards your holiday shopping this year.  Last year, according to American Research Group, Inc., consumers spent an average of $854 on holiday shopping.  Let’s say, you decide you want to save $1,000 for the holidays.  If you start saving now, you’ll only have to save $200 a month or $100 a paycheck.  Set up special savings account earmarked for this goal and set up a monthly transfer or direct deposit so that you reach your goal by the time the holidays roll around.  Don’t forget to factor in money for gifts for holiday parties, like bottles of wine and holiday baking.

Make a List and Check It Twice

Who are you planning on buying gifts for this year?  Make a list and then rewrite the list according to the highest priority.  Next to the person’s name write how much you’d like to spend on a gift.  Add up the total dollar amount from your list so that you make sure that you’re not going to go over budget before you even start shopping.  By having an idea of what you can afford to spend on each specific family member or friend, you’ll be able to quickly evaluate whether or not a specific purchase fits in your budget.  If you think you’ve found the perfect gift for your sister but it costs $200 and you only planned on spending $75, then don’t make the purchase.  Work on finding something that fits within your budget.  Since you started saving early, you’ll have time to find a great gift!

Get Creative!

For the people that end up further down your holiday list, such as co-workers or friends, think about giving a homemade gift.  (Personally, I treasure a homemade gift the most!)  A platter of cookies or brownies can be a great gift for co-workers.  Bath salts, teacup candles, and hand made jewelry can make great gifts for friends.  In case you’re not sure where to start, here’s a list of 25 Handmade Gifts for Under $5. Check out Pinterest for more great ideas!

Start Gathering and Creating Now

Since time is on your side, you don’t need to rush to find the perfect gift!  Instead, keep your eyes out for a great deal.  Black Friday and Cyber Monday are days that can offer big savings, but if you don’t already have the money set aside, then you won’t be able to take advantage of the fabulous deals – so start saving today!  Or if you decide to go all out and knit scarfs for everyone, then start gathering your supplies now so that you can start working on them.  Remember, spending time with friends and family around the holidays is more important than any gift.  A little planning now, goes a long way!