Ten ways to budget and save for the holidays

The holiday season is just around the corner. And while the holidays are supposed to be a time of good cheer, the hustle and bustle of the season can lead to the stress of balancing holiday shopping, decorating, entertaining and more.

By Scott Haen

As Vice President, Consumer Banking Regional Manager, Scott leads a team of highly experienced bankers who are committed to building long-term relationships and providing clients with personalized financial solutions. He joined Johnson Financial Group in 2012 and has a strong background managing multiple retail banking offices. Scott specializes in business development, collaborative team building and strengthening relationships.

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With the pandemic putting a halt to traditional holiday plans last year, the 2021 holiday season may bring a strong interest in compensating for lost time with a renewed focus on gift-giving, decor, cooking, entertaining and travel. More than one in three holiday shoppers plan to spend more than in the 2020 season, and consumers expect to spend a record $937 on holiday purchases – a 5% increase from last year. In addition to gifts, this holiday season may see an uptick in gatherings and travel, with airline ticket purchases and hotel bookings expected to increase.

A rise in spending makes it even more important to focus on your holiday budget. Scott Haen, Consumer Banking Regional Manager, shares ten ways to budget and save so you can enjoy the holidays without sacrificing your long-term financial goals.

1. Prioritize saving throughout the entire year.

Saving for the holidays shouldn’t start on Black Friday; it needs to start on January 1. Doing so puts you in a better position to pay for gifts at the time of purchase instead of making credit card payments well into the second quarter of the next year. Set up a separate savings account just for holiday expenses and designate a set dollar amount to automatically come out of each paycheck. Watch it grow over the course of the year, but don’t touch the funds. If you are paid every other week, saving $5 dollars each pay period is another $130 towards your holiday budget. Start small and ramp up the amount each year if you are able. It may be a huge stress reliever come December.

2. Create a holiday budget.

Start by writing down the names of your gift recipients and allocate an approximate dollar amount you are willing to spend on each person. Keep the list of names in a spreadsheet or an app from year to year and use it to reset your budget as your start to plan for the next holiday season. Try to stick to the list as you shop but be prepared for some last-minute additions.

While this is a great first step, don’t stop there. Consider other categories of the season – dinners and drinks with friends, travel, decorations, and of course – let’s not forget gift wrap. I learned many years ago to simply budget for this instead of questioning the gift wrapper in my house. It helps with the “holly and jolly” component of the season.

3. Monitor your budget and track your holiday spending with MyJFG.

MyJFG is a great place to start your holiday budget. The enhanced digital banking solution is easy and intuitive to get you through the holidays without turning into Ebenezer Scrooge. Once enrolled, transfer some start-up money into your account, set up a regular transfer into the account, and monitor your balance throughout the year.

When you’re ready to start spending, monitor your account activity and use Bill Pay to make payments. To keep track of your total holiday spending, check out the Budget tab within the MyFinance Manager tool and create a “sub-budget” for holiday expenses. This will allow you to categorize gift-giving expenses and other miscellaneous expenses that can add up during the season.

4. Use rewards points.

When you begin shopping, consider using a rewards-based credit card to make your purchases. At the end of each shopping trip, whether in-store or online, add up your purchases and immediately make the payment to your credit card. Believe it or not, you don’t need to wait to receive your monthly credit card statement to make a payment. If you want to supplement your spending power during the holidays, bank your rewards points on your credit card over the course of the year and use them for a statement credit for some of your holiday purchases.

5. Utilize online apps and tools to manage holiday wish lists and find deals.

Online tools and apps can supplement your budgeting efforts, and for budget nerds like me, they can be fun too. Visit the app store on your phone, search “holiday budget manager” and find a handful of free tools that could be game changers for your holiday shopping. Certain apps will allow you to import your recipient list from your phone’s contacts, set an overall budget, and keep track of your spending along the way. You can also find links to wish lists you’ve previously saved with specific retailers, offer gift ideas, and find the official countdown to Christmas and any other celebration you may want to add.

6. Shop early.

With online shopping becoming more popular, no longer can you count on Black Friday as the kick-off to holiday savings. Instead, retailers are each setting their own start to the holiday shopping season. The good news is these retailers are heavily advertising to ensure consumers know when to line up at their door or visit their website. With key dates usually beginning around the first of November, you may likely see your inbox and social media sites start to fill with promotions.

If there has ever been an advantage to starting your shopping early, it’s now. Shipping and supply chain challenges, along with product availability, will again be a factor this year. Give yourself an extra week or two to guarantee your gifts are in hand when you need them. Merchandise is unlikely to be replenished throughout the holiday season as it has been in the past, making it risky to wait for better prices.

Shopping early can also save you money. When shopping online, save the items in your wish list and monitor the price. Watch for the items to go on sale or for the retailer to potentially offer free shipping on your purchase. If you’re shopping in person and unsure if the price is a good deal, scan the UPC code into the Amazon app. If it’s offered at a better price online, shopping early will allow you time for shipping. Long story short, it’s never too early to start your holiday shopping.

7. Shop small.

Along with Black Friday and Cyber Monday, keep in mind the business owners in your own community. Small Business Saturday is a great opportunity to shop local and find something unique that may not be offered online to the masses.

8. Consider unconventional gift ideas.

If you are creative, put your talents to the test and make a gift. If you’re like me, this isn’t going to work. However, you could still offer your services to someone. A few years ago, the best gift someone could have given my wife and me was a free night of babysitting so we could go out for dinner or a movie. For some, this type of present will beat anything you could possibly buy on Amazon.

If you’re getting together with friends or co-workers, suggest a white elephant theme. This way, you can skip the cost of buying a gift and instead part with something that has been collecting dust on your shelf.

9. Make new holiday memories and traditions.

Creating new traditions and experiences can be a great way to save money while building rich memories with family and friends. Each year, my siblings and I gather our kids to help cut down Grandma and Grandpa’s Christmas tree. We all trudge across the tree farm, throw a few snowballs, and complain about how cold it is. After we cut down the tree, we drink some hot chocolate and decorate the tree at their house.

10. Remember the reason for the season.

If cutting down a tree isn’t for you, no problem. Could you gather some friends to volunteer at a local food pantry or soup kitchen? Volunteering any time of the year can be rewarding, and even more so around the holidays. If you have the means, it could be as simple as picking a name from a giving tree at your place of work or worship and spending $10 on a toy or a pair of mittens for a child in need. You can even enlist your friends or family to support the cause and sponsor a family instead of buying gifts for each other.