Here we are in mid-September, settling into our frantic fall filled with work, school activities for many, football, the World Series, Halloween and Thanksgiving.
Christmas follows swiftly. It’s only 14 weeks away.
Are you ready?
We can’t stop the clock, but planning now can ease holiday stress later, advises Todd Pietzsch, spokesman for BECU, Washington state’s largest credit union.
It can also save you money.
Set a savings goal
First, figure out how much money you think you will need for holiday presents. That’s your Christmas savings goal.
Pietzsch told Money Talks News you should assign a dollar amount to each person for whom you’ll buy gifts. Who’s on your list? Children, parents, spouses, nieces and nephews, brothers and sisters, friends? The office gift exchange? Anyone else? Can you pare your list?
Add it up. And if you haven’t put any money away yet for the holidays, divide by 14. Try to put that much away each week starting now by paying yourself first.
For example, say you want to spend $500.
Putting $36 a week away now will yield $504 by Christmas to cover presents.
Set up an automatic deduction from your payroll check, or automate transfers from your checking account to your savings account, Pietzsch suggests. You can set up an account with a name, such as Christmas Club.
Saving now means charging less for Christmas presents, even if you don’t reach your total savings goal.
“You don’t want to get hit with a lot of credit card debt you can’t pay,” Pietzsch says.
If you charge $500 in gifts on a credit card with an 18 percent interest rate, and pay only the minimum balance due each month of $20, it will take you 42 months, or more than three more Christmases, to be rid of this year’s holiday debt, according to online payment calculators. In that time, you will pay $674 total including interest, making this year’s gifts cost about one-third more that you planned.
Track your money
“The first step to savings is understanding where your money is going,” Pietzsch says.
BECU recently launched an online and mobile app called Money Manager. You can find a similar service with a Money Talks News partner, PowerWallet.
With both, and other similar aggregating apps, you can view all of your accounts in one place — checking, savings, retirement accounts and more. They let you set up budgets and track your spending by category.
“You see where money is going,” Pietzsch says. “You make it automatic again and see how you’re progressing toward your goal.”
The apps show you if you’re spending more than you planned to on dining out or gas, for example.
You can see where you want to cut back spending, or where you have a financial cushion, says PowerWallet. You can also set up alerts for bill payments or when your spending strays from the plan.
These tools can help you keep a clear picture of where you stand.
Raising holiday cash
If you’re trying to come up with some Christmas cash, Money Talks News financial expert Stacy Johnson has a few suggestions:
- Check your cell plan: If you’re not using minutes that you’re paying for, switch to a cheaper plan that could save you $20 a month. Consider dropping your landline for another $25 to $50.
- Drop your gym membership: Stay in shape by jogging outdoors or weight lifting or following fitness videos. You’ll get leaner while fattening your wallet by $35 (or more) a month.
- Raise your insurance deductible: Change your car or home policy from a $250 deductible to, say, $1,000 and pocket as much as $200 right now.
- Curtail cable: Drop premium movie channels to save $25 a month. Or cut cable altogether and save a lot more.
More ways to get ahead of the holidays
- Layaway: Some of your favorite department stores offer in-store and online layaway opportunities. At Kmart, for example, you can visit the layaway counter, put $10 down to set aside an item and then arrange an eight- or 12-week contract for paying off the item. You can’t pick up the item until it’s paid off, and there will be a service fee of $5 or $10, depending on the contract. But you won’t be worried about paying off the item after the holidays, either.
- Gift IOU: Worried about paying too much before Christmas, especially for a big-ticket game console or television that will be marked down more during January clearance sales? Wrap an IOU that goes with a less-expensive token gift, suggest some money experts. If the IOU goes to a child, you’re also giving lessons in money management and patience.
- Shop early: It’s not too soon to look for bargains for people on your list. Look for end-of-summer clearance sales or online specials with free shipping. This is the time of year for deals on clothes, bikes and outdoor gear. Now is when you have time to ponder and shop relaxed instead of emotionally. Just don’t lose track of where you stash the gifts you buy now.
If you get started now instead of waiting until you’re in the middle of the frenzied holiday season, you could give yourself the gift of less stress and more Christmas joy.
Do you have tricks for saving for or during the holiday spending spree? Share with us in comments below or on our Facebook page.