The holidays will be here before you know it! Prices continue to surge and waiting to prepare for holiday expenses until December can result in unplanned holiday debt payments with interest well into the new year. Avoid excess holiday debt by saving today with these steps to create your holiday savings plan!
Create a List of Gifts
The first step to ensure your holiday expenses are covered is determining what you will spend on gifts. To get started, list everyone you will be shopping for and how much you plan to spend on each person. If you find yourself stuck on this, you can always refer to what you spent last year or research the prices of certain items you’re guaranteed to buy. When referencing what you spent last year, be careful to factor in the potential for rising costs due to inflation.
Add Up Additional Expenses
Don’t forget that your holiday savings plan needs to include more than gifts. Make sure to add any additional estimated food costs, new decorations, and holiday events to your shopping list. Extra expenses like a bottle of wine, gifts to your kids’ friends, and food can add up quickly. While many of these prices can be researched in advance, some notable costs to get you started are the average cost of a batch of cookies is $6.40 per batch with all of the ingredients added, and the average cost of a bottle of wine is $10.97. These prices can vary by state, but those above apply directly to Massachusetts.
Determine a Budget
With all your holiday expenses totaled together, it’s time to build your savings plan. First, you’ll want to determine the number of weeks left until Christmas, then divide your total expenses by that number. For example, the average consumer plans to spend $1,430 during the 2022 holiday season, and with ten weeks left until the holiday, they would need to save an extra $140 per week.
Consider Setting a Spending Limit
An alternative method for creating your holiday savings plan is to determine how much money you can save and generate a number based on that. For example, if you’re only able to stash away $70 per week, you’d save $700 in 10 weeks. This would become your limit for all your holiday expenses and the baseline for organizing gifts, entertainment, and other expense categories mentioned previously. Keep in mind that you can implement a holiday savings plan at any time during the year if you’d like to spend extra or lean into homemade and smaller gifts if your current budget feels too small.
Keep Holiday Savings Separate
As it gets closer to the holidays, keep in mind that keeping your holiday savings separate from the rest of your money is essential. This ensures you don’t accidentally spend your stash on everyday expenses. One of the most effective ways to organize your funds is to open a Savings Account and automate your weekly savings transfers through Mobile or Online Banking. This ensures you never miss a deposit and takes the added stress of dealing with your holiday budget until it’s time to shop!
Are you preparing your finances for the holidays? Start saving today with a Savings Account from Mechanics Cooperative Bank that best fits your savings plan! Contact us today to get started.