The holidays are just a few months away. If your bank account is nearly depleted – and you want to buy gifts while avoiding credit card debt – you need to start saving right now.
Following are 13 ways to fund your gift shopping without feeling much pinch at all.
We also estimate the amount of money you can save between Labor Day and New Year’s by following these tips.
And if you’re pinched for money, we have more help about how to trim your spending on gifts.
1. Stop lending to Uncle Sam: $964
If you get a fat tax refund each tax season, you’re giving the U.S. government an interest-free loan. Stop that.
Late in March – with 83 percent of tax returns already filed – the Internal Revenue Service said refunds were averaging $2,893 per check.
Spread over 12 months, that is about $241 per month. Adding up that amount between Sept. 7 and Dec. 31 would give you $964 for gifts.
To make sure you have more money during the year – rather than getting a big refund at tax time – you will need to change your W-4. That is the IRS document you fill out that tells your employer how much to withhold from your paycheck for federal income tax.
The IRS offers information about withholding at its website.
2. Start a Christmas Club: $400
Donna Freedman describes this time-honored way to save for holiday gifts:
Back when the Earth was still cooling, my mom had a Christmas Club. The workplace credit union took a certain amount from her paycheck each week so that she and my dad could pay cash for all of those bikes.
Open a bank account just for this purpose and set up an automatic monthly deposit into it. Start saving $100 a month now, and you’ll have $400 by the holidays.
3. Sell things you don’t need: $100 to $400
Gather up gently used clothes, sports equipment, musical instruments, books, furniture, electronics, dishes, antiques, movies and video games you no longer use.
Then, have a sale. Let someone else enjoy the items while you fatten your holiday fund. Before holding a yard sale, try these ways to get top dollar for used items.
4. Make micro trims: $400
Make a bunch of small cuts in your spending on discretionary items. Perhaps you drop one night of dining out per month, or cut a couple of snacks out of your grocery budget.
Make enough of these small trims to save $100 each month.
You’ll hardly notice the difference. Put the monthly $100 you save into your holiday fund.
5. Earn extra cash: $400-plus
Think about what you can do to make extra money before the holidays. You might like walking other people’s dogs or even caring for them in your home, for example.
You also could turn your hobby into a small business, tie fishing flies, deliver newspapers, drive a school bus or work as a customer service representative.
Here are 20 ideas for ways to earn some extra money.
6. Put your phone bill under a microscope: $120 to $200
Take a good look at your phone bill. See if you really are using all the minutes and data you’re paying for. If not, drop your plan down a level and put the money saved into your holiday fund.
Even if you are using all those minutes and gigabytes, could you cut back a bit and save? If you can slice $30 to $50 a month off your phone bill, that’s $120 to $200 by the end of the year.
7. Drop your gym membership: $232
If you’re like many gym subscribers, you are not getting your money’s worth out of the membership. Recommit to exercise — for free. Try these ideas:
- Find free gear and workout videos on Freecycle
- Dust off your bike and climb aboard.
- Get a buddy to commit to walking with you.
- Buy a cheap pedometer and record your daily mileage.
If you can’t let go of the gym membership yet, take a break. Some gyms let members take one to three months off a year, meaning that you skip those months’ payments and stay away from the gym.
Typically, gym members use their facility twice weekly, on average, spending $58 a month for the privilege, according to research institute Statistic Brain. Savings: $232 by year’s end.
8. Modify your car insurance coverage: $30-$80
If you’re driving an older vehicle, you may be able to save by dropping the collision and comprehensive auto coverage.
CarInsurance.com consumer analyst Penny Gusner says she looks less at the cost of coverage than at the value of the car. “If you wouldn’t repair it for a major mechanical issue, you probably shouldn’t insure it for comprehensive and collision,” she says.
Collision and comprehensive coverage costs about $242 a year for a 40-year-old Delaware resident who has a clean driving record and drives a 2002 Chevrolet Impala LS (worth about $3,650) in good condition, CarInsurance.com says. So dropping that is a savings of about $80 over four months.
Raising the deductible amounts on your car insurance policy from $250 to $1,000 can save you $100 or more a year, depending on factors like the age of your car. That can save you about $30 or more over four months.
9. Take a brown-bag lunch to work: $306
If making lunches isn’t your thing, don’t worry. This isn’t a lifetime commitment. For a few months until the end of the year, cut out restaurant food and take your lunch to work. You might even grow to like the money you save.
A couple of years ago, a Visa study found that workers who go out to lunch spend an average of $936 a year. You have 17 weeks before the end of December, during which you could save $306.
10. Quit smoking: $580
Get a jump on your New Year’s resolutions by quitting your tobacco habit right now. If you are a pack-a-day cigarette smoker, at $5 a pack, you’re spending $1,825 a year. That’s about $580 you can save between Labor Day and New Year’s Eve.
11. Cut the cable: $256
Dumping cable TV is an increasingly attractive option. You can pick up HDTV on local stations for free with an antenna, watch plenty of shows for free online and, with a subscription to Netflix, Amazon Prime or Hulu Plus, stream all the movies and premier TV shows you can watch.
The Federal Trade Commission says the average cable bill is about $64 a month, not including taxes, fees and equipment charges. Cut the cord, and the average household stands to save $256 in four months.
What tips do you have for saving up holiday cash? Tell us in a comment below or at Money Talks News’ Facebook page.