Although the holidays come at the same time every year, way too many of us fail to budget for them. This year the National Retail Federation expects total spending to reach $655.8 billion. It’s likely that a bunch of that will go on credit cards — and in some cases those cards won’t be paid in full once the bills arrive.
According to a recent survey from TransUnion credit bureau, 89 percent of male consumers plan to pay off holiday spending within the first quarter of 2017, while only 73 percent of female shoppers believe they’ll be able to do so.
In other words, these buyers will pay interest for up to three months after the gifts are opened. And that’s assuming no emergencies crop up to keep them from paying in full. (Sound familiar?)
What if you could set aside money painlessly, all year long, and be ready to pay cash on the barrel head?
The good news: You can! And not only does this not need to hurt, it can actually be fun.
Small steps, big rewards
As I note in “Your Playbook for Tough Times,” small savings can add up to big bucks over time. The following slide show offers more than three dozen ways to set aside a few dollars here and there and wind up with holiday spending cash. Not all of them work for everybody, but at least some of them will.
(Money Talks News founder Stacy Johnson has negotiated a discount for his loyal readers. Visit this link and enter the discount code MTN to pay just $5 for a PDF version of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” for just $5.)
Remember that old poem, “Little drops of water/little grains of sand/Make a mighty ocean/And a pleasant land”? Think of each dollar (or dime) that you save as a small part of a major goal – which, by the way, could be something other than a cash-only Christmas.
The following money hacks can also help you create an emergency fund, save for retirement, help your kid pay cash for college or achieve some other money goal.
Bank on it
Set up a small, automatic withdrawal from each paycheck at your credit union or bank (online or virtual). If you don’t see it, you can’t spend it. Start with at least $5 per paycheck and gradually increase it.
Save that raise
If you’re lucky enough to get a salary increase, make that the amount of your automated withdrawal. So what if it’s only $8 per weekly paycheck? A year from now you’ll have an extra $416 in your holiday (or whatever) account.
Bank that bonus
Some lucky folks get an annual cash gift from the company. If you’re lucky like that, spend 10 percent of the amount on something you truly want/need, and put the rest away. Seeing that big jump in your (whatever) account will inspire you.
And if your employer’s idea of a bonus is a gift card to Olive Garden? Sell it, either through word of mouth, a Craigslist ad or the secondary market. The aggregator website Gift Card Granny will help you get the most bang for your plastic buck.
Here’s a tip
So you’re in a profession – child care, building superintendent, salon worker, housekeeper – whose clients tend to show a little appreciation around the holidays. Spend 10 percent of the holiday tip, then bank the rest.
Tuck away reimbursements
Got a flexible spending account? Get paid for work-related expenses like mileage or meals on the road? Try to put away even 5 to 10 percent of each repayment.
Front-load a discount
Instead of using cash, credit or debit, pay for regularly purchased items with discounted gift cards bought on the secondary market. For example, buying a $50 Petsmart card for $40 would mean $10 for the fund.
Save your savings
When you redeem a coupon or get a customer loyalty discount, put away the difference. Check the bottom of your receipt for “you saved X dollars today” info. Another form of this is to…
Let the banks save for you
Programs like Bank of America’s “Keep the Change” and Wells Fargo’s “Save As You Go” will transfer small amounts of cash into your savings account each time you use a debit card or pay bills online. Easy enough.
There’s an app for that
Apps such as Tip Yourself and Digit let you send small amounts of money into savings accounts; another one, Acorns, puts tiny amounts of money into exchange traded funds (aka “micro-investing”). These aren’t for everyone but can be a painless form of stealth savings.
If you’ve got an ounce of competitive spirit, some or all of these savings hacks can get your frugal blood pumping. Such as…
The pantry challenge
You’re worn out on a Thursday evening and want to say “yes” when your roommate proposes splitting a pizza. Instead, poke around in the cupboards and fridge and make dinner from what you find (even if it’s a weird repast like tomato soup, toast and dried apricots). Figure what your share of the delivery would have been and send it to your account. Bonus: You got rid of food before it became too old to eat.
An oldie but goodie: Every night, drop most or all of the coins from your pocket/wallet into a can or jar. Wrap it and bank it every few months. If your financial institution frowns on rolled coins, exchange a couple of dollars’ worth of coins for dollar bills (convenience stores and supermarkets will probably do this for you) and put those singles in the jar.
Is that a penny on the sidewalk? Did someone leave a quarter in the soft-drink machine, or drop a nickel at the checkout counter? Money is everywhere if you don’t mind picking it up. Put it in your spare-change challenge jar or start a new one for found money.
The first week of January, bank $52; the second week, set aside $51; lather, rinse, repeat by $1 less each week. By the end of the year you’ll have banked $1,378. You could also do it the other way around: The first week of January bank $1, etc.
The first week of each month put $1 in a jar, the second week $2, and so on. Start over the next month. You wind up setting aside $10 to $15, depending on whether it’s a four- or five-week month.
Take all the singles out of your wallet at night and stuff ’em in a jar. Feeling flush? Make it a $5 bill challenge.
Random number challenge
Every night choose a number (or let your kids do it). Check the serial numbers of the bills in your wallet: If any end in the chosen digit, that means that cash goes into the savings jar.
Propose this to a relative or friend who also wants to save: “I dare you to try to set aside more than I do in the next two months. If I win, you have to scoop the backyard/bake my favorite dessert/buy me lunch; if you win, you get to name the prize I give to you.” Here’s where that competitive spirit comes into play – and no matter who finishes with more money, both of you win.
Get a second job
Not always as simple as it seems, especially if you live in a place where getting a first job can be challenging. (Hello, Detroit!) Working extra hours when you have children can also be tough.
However, it may be possible to find jobs that don’t require you to leave the house or that let you get paid for things you enjoy doing (crafts, teaching a skill) or were going to have to do anyway (walking a neighbor’s dog along with your own).
Learn more at:
Not all found money is lying on the sidewalk. Try some of these tactics to build up your account.
If you live in a place where cans and plastic bottles are worth a nickel or more apiece, start collecting: at work, on walks, from friends/family (some will be glad to have someone else take care of the recycling). Even places without deposit laws have places to recycle aluminum by the pound.
You’ll need a place to store the cans and bottles, of course, and you’ll also need to rinse them out lest the smell draw vermin (or gross out your family – stale beer really stinks). Most important of all, you need to determine whether it’s really worth it. Driving 15 miles round-trip to recycle two bucks’ worth of aluminum is not a smart use of your time. Or your vehicle.
Occasionally banks (brick-and-mortar or virtual) offer a cash stimulus to get people to open accounts. Turn that new account into the place you keep your someday fund, and use the incentive as seed money.
Join rewards programs
Sites like MyPoints, InboxDollars and Swagbucks let you earn points for activities like using their search engines, watching videos, taking surveys and playing games. InboxDollars pays by check, and MyPoints and Swagbucks let you cash in for PayPal.
Take surveys/join focus groups
Many surveys take place online – no need to leave your house. But you have to pick your spots. For example, a 45-minute survey that pays you with a chance to win a $25 Amazon gift card is not a good use of your time.
But some sites pay decently, and it’s fun to give your opinions. You might even be sent new products to try taking surveys for money.”
Focus groups are surveys on steroids: You and other people are shown videos or slide shows, or given a new product to try, and then give your opinions. See what’s available in your region at Consumer Opinion Services and FocusGroup.com.
Stash your rewards
Got a rewards credit card? You could be sitting on cash. Discover card’s annual holiday shopping survey indicates that 67 percent of consumers like to turn their holiday shopping rewards into cash-back vs. gift cards or travel.
If you’re using plain-vanilla plastic, check out the Money Talks News “Solutions” page for rewards credit cards with the best value. And remember: This is not a license to spend! Never buy anything you can’t pay for in full when the bill arrives.
Not everyone has a ton of toys or valuables to jettison for cash. However, you might be surprised by what people are interested in buying. I once sold a plastic statue of a baseball player for $1,200 on eBay.
Learn more at “Where to Sell Your Stuff for Top Dollar.”
Change the way you roll
Willpower can be a lot harder than it looks. But adjusting your habits can ultimately benefit your health as well as the financial bottom line.
Nix a vice
Don’t just go cold turkey on cigarettes, booze, junk food or whatever your particular weakness may be. Be conscious about what you’re spending and slowly, slowly reduce consumption. Calculate what you’ve saved each week and put those dollars into your fund.
Rework other habits
So you’re a cinema junkie who hits blockbuster movies on opening night. Get in the habit of going to the first show on Saturday morning – it’s not that long to wait and it’s cheaper. Or suppose you and a pal meet for beers every Friday after work. Instead, buy a six-pack of your favorite brew (whether it’s a craft beer or plebeian suds like Budweiser) and take turns hosting the evenings of liquid relaxation.
Figure out what practices cost you the most and then look for ways to modify them. Book-buying jaunts can take place in secondhand bookstores, mani-pedis might be done at home, trips to the cupcake place could turn into an afternoon of baking your own treats. Look for ways to meet your needs without busting the budget. (Besides, decorating cupcakes is just fun.)
Bring it from home
Packing your lunch can mean huge savings, obviously. But consider your snack habits as well. If you hit the soft-drink or candy machines a couple of times a week you’re probably dropping $20 or more per month.
Watch for loss-leader sodas and snacks, or buy them at warehouse stores. Keep treats in your bag, desk or locker, then send a couple of bucks a week to your fund.
Swear by it
You may have had run-ins with the “swear jar,” either at home or in the workplace. Create your own version and drop in a quarter every time you drop an F-bomb. (Hint: Your kids will love to call you out on it.)
This is one savings tactic that will, with luck, stop producing. But that’s a good thing! After all, you want to present a more professional image on the job (or at least keep from creating a hostile work environment), or to show your kids that potty talk is the sign of a limited vocabulary.
The polar opposite of the swear jar. Suppose you walked 10 blocks to work instead of hopping on the bus, or packed a sandwich instead of hitting the Value Menu. Way to go! Now: Put a couple of bucks into the Jar of Virtue.
Money mind games
A great way to revamp money behaviors is to change the way you look at your dollars. For example…
Your kid will graduate high school in 2020? Save $22 (2 + 0 + 20) per month, or more than once per month if you can.
Don’t have kids? Try thinking something like this: “I hit retirement age in 38 years, so I’ll start setting aside $38 per week/month into an emergency fund (or whatever).”
Name your dollars
My online bank lets me assign names to sub-accounts. I’ve got three: “Malachi’s College Account,” “Britain’s College Account” and “Cash for New Car.”
Try it. Each time you send money to an account named “Emergency Fund,” “Home of Our Own” or “Cash-Only Christmas,” you’ll be reminded why you save.
It’s a bill, so pay it
Free budgeting sites like Mint.com and Money Talks News partner PowerWallet have “bill reminder” features. Set up “Someday Fund” (or whatever you call it) as a bill, even if it’s only for $5 a month at first. Knowing the bill is due can make it easier to factor savings into your monthly budget.
Picture your goal
Rubber-band a photo of someone/something you love to your credit/debit card. Seeing your infant child, or your dream home, will remind you of why you’re being smarter about money.
Or tape a Post-It note to the card. When you’re tempted to splurge, words like “retirement fund” or “new roof” will give you a frugal goose.
Change your password
Turn your debit-card PIN to a date with serious resonance, such as “0819” for the baby’s due date or “2024” for your daughter’s high-school graduation year.
Typing in those numbers could help you keep from withdrawing an extra $20 in walking-around money, or cause you to tell the store clerk “Never mind – I’ve decided not to buy this graphic novel/these T-shirts.”
If you’re an inveterate online shopper, change your site passwords, too.
Launder some funds
Each time we do a load of wash at our house we put $2 in a jar. We call it the “New Washing Machine Fund,” but it actually got used to help replace the 30-year-old stove.
Yours, of course, will go into the (Whatever) Fund.
Save it forward
You finally paid off that new-to-you vehicle. Woot!
Now: Keep making the payment — but to yourself. Transfer that amount into savings each month. If you can’t manage that, then try to save at least half.
Round it up
Any time you write a check — if you still do that — or use a debit card, round it up to the next dollar in your records. For example, a $22.52 drugstore trip turns into “$23” in the check register.
At the end of the month, add up the differences and send them to the fund.
Steal from yourself
It’s the night before payday and you’ve still got $49 in checking. Send $9 (or $19) of it to your fund.
39. Save money – and, maybe, your finances
Once you’ve mastered some of these hacks, give yourself a big ol’ kiss on the cheek. Saving can be tough, especially if you’re already living paycheck to paycheck. Changing money habits in order to meet future goals may feel exhausting – and maybe even painful, if you’re squeezing dollars from an already-strained budget.
Re-frame that pain! Think of it not as doing without, but as making progress. Thanks to your creativity and care, you’re actually moving toward a goal (or goals) rather than merely juggling bills and praying that nothing goes wrong.
In other words, you’re working toward peace of mind and a brighter financial future. Whether you start during the holiday season or not, that’s a huge gift to give to yourself.
What’s your secret for saving? Share with us in comments below or on our Facebook page.