Shopping for the holidays is expensive. When you factor in all of your friends and family members, you may be looking at a big bill this holiday season. Add to that the cost of decorating and hosting parties, and you have quite the tab! That’s why we believe budgeting for the holidays should start early.
The Benefits of Having a Holiday Budget
Starting a holiday budget before the actual holidays is beneficial for several reasons. Firstly, you won’t need to scramble to find ways to pay for gifts. Next, you’ll avoid starting the New Year with debts. Most people take start of the year as an opportunity to better themselves, often financially, and not having holiday debt to start with is a huge plus! You also can't underestimate the amount of stress holiday shopping brings, and financial concerns are a huge part of that.
Lastly, you will know how much money you have to work with before you shop. This budget-conscious approach is certainly better than just putting everything on your credit card and seeing what the damage is when you check online banking later.
Creating a Holiday Budget
The first thing you should do before creating your budget is to make a list of everyone you’re planning to buy gifts for, and estimate how much you think you’ll need for each person. Add everything together, and you have your target gift budget goal! If the number is too high, you can run through the list and make edits where needed.
If all you need is a budget for gifts, you can stop here. If you need money for decorating or for parties, you’ll need to add a few more things. You may have decorations sitting up in the attic from past holiday seasons. If a few things need to be replaced, make sure you add that to your budget.
Saving for Your Holiday Budget
If you’re starting in July, that means you have a little more than five months to save to meet your target goal.
Modify Your Existing Budget
Editing an existing budget is a great way to start. Let's say that you make $1,500 a month. If 50/30/20 budget at the moment, where 50% of your income ($750) is spent on your needs, 30% on your wants ($450) and 20% ($300) on savings, you can edit your budget for the rest of the year by modifying those percentages. For example, spending 25% on your wants, 15% on savings and the remaining 10% specifically for your holiday budget.
There are many ways to budget, so find a way that works for you!
For Those That Don’t Have Budget
While we do recommend you start one, saving for your holiday budget can be as easy as saving a part of your income each month and being disciplined. Since you know your goal, you can calculate how much of your income you’ll need to save each month to hit your target.
If you're a Florida Credit Union member, we recommend you check out our savings goals feature on online and mobile banking!
Other Ways to Save
It goes without saying that reducing discretionary spending will help you save money each month. Cutting down on eating out, going to the movies, stopping for coffee on the way to work, etc., can make a drastic difference on your budget.
The Florida Credit Union Difference
If you’re looking for a place to save your money specifically for the holidays, we have a Holiday Club Savings Account just for that! Simply make regular deposits throughout the year, and the funds will be automatically transferred into your checking account in November, right when you need it!
Florida Credit Union is a full-service financial institution. Founded in 1954 as the Alachua County Teachers’ Credit Union, FCU now services over 130,000 members in 48 counties throughout North and Central Florida. For more information on the services we provide, visit FLCU.org or call us at 1-800-284-1144.