6 Holiday Budgeting Tips to Help You Save Money While You Celebrate
At their best, holidays are packed with gift-giving, festive meals, and moments with the people in your life who matter most. The trick is to enjoy these celebrations while staying within your budget. With a little planning and our top six holiday budgeting tips, you can spread joy and build strong financial habits to take into the new year.
1. Set a Realistic Holiday Budget
Prepare a realistic estimate of how much of your discretionary income —that’s what's left after paying regular bills and contributing to savings — you can afford to devote to holiday expenses. Consider including categories like gifts, food, travel, and decorations in your holiday budget. Be practical about what you can spend and set aside some money for unforeseen costs.
Once you've decided on an overall holiday spending limit, you can determine how much to spend on each person. Explore cost-effective options like homemade gifts or budget-friendly activities to maximize your budget. When you find the right gift, make sure to compare prices to find the best deal.
2. Consider Opening a Holiday Savings Account
A holiday savings account can be any savings account that you open in addition to your regular savings account or emergency fund. The idea is to put away money throughout the year, letting it grow for holiday spending. Look for specialized holiday accounts or other savings accounts with competitive interest rates. To simplify saving, consider setting up automatic deposits to your account from your checking account or by using direct deposit.
3. Automate Your Savings to Prepare for Holiday Spending
Look for special savings tools banks and credit unions may offer to help make saving money easier. For example, KeyBank offers EasyUp®. You can use EasyUp to automatically save an amount that works for you — from 10¢ to $5 — every time you make a debit card purchase. Send that money directly to your KeyBank savings account and let it grow or to a company to pay down a debt faster.
4. Use Credit Cards with Rewards or Low Introductory APRs for Holiday Spending
Credit cards with low introductory APR, rewards or cashback can help you get the most from your holiday budget. You could get rewarded on your holiday spending by using a card like Key Cashback® Credit Card which lets you earn cash back on your purchases.
And, the KeyBank Latitude® Credit Card offers an introductory APR interest rate on purchases allowing you to pay for your purchases over a set period of time without incurring interest.
Keep an eye out for credit card offers that provide bonus rewards for spending a certain amount during the initial months of opening the account. And take advantage of promotional Annual Percentage Rates for holiday shopping.
5. Find the Best Deals on Gifts
Instead of waiting until the festive season arrives, start holiday shopping early to take advantage of earlier sales and better selection. Keep your list of gift recipients and ideas handy, so you'll be ready when you spot a good deal.
On the other hand, if you plan to buy items that tend to go on deep discount later in the year — like camping gear in October or video games in November — you may want to hold off until then.
Plan your Black Friday, Small Business Saturday, and Cyber Monday shopping to focus on finding a few great bargains rather than checking off your entire list at once. Check out price comparison sites, use smartphone apps, and follow retailers' social media accounts to look for deals.
6. Plan Ahead for Holiday Travel
Timing is everything when it comes to managing holiday spending on travel. You can generally get the best savings on Christmastime air travel if you book between October and mid-November. If you’re planning a destination New Year’s celebration, you’ll save the most by booking your flight by early November. And don't forget to look for opportunities to apply credit card cash back dollars to travel and lodging.
The day you take your holiday trip can make a huge difference in how much you pay. The Friday before Christmas, for instance, is said to be the most expensive day for a flight. Being flexible about your schedule can help you score a cheaper fare.
By taking proactive steps like these, you may be able to better manage your holiday finances and ensure a more stress-free season ahead.