How To Create A Holiday Savings Plan

This post is written in partnership with Canvas Credit Union. All thoughts and opinions are my own.

Ready or not, the holidays are right around the corner. Halloween candy is out for display, and Thanksgiving tablescapes adorn magazine covers. It’s that time of year. With school underway and chillier mornings here to stay, let’s chat about the importance of a holiday savings plan. Whether you’re planning to spend the holidays at home or elsewhere, it’s important to evaluate upcoming expenses.

Between shopping frenzies like Black Friday and Cyber Monday, sales are inevitable in the fall. Regardless, saving money is key. From gifts and holiday decor, to cookie exchanges and ugly sweater parties, the average American pays for quite a few expenses during Thanksgiving, Christmas, Hanukkah, and Kwanzaa.

The Average Cost Of The American Holiday season

The holiday season in America seems to be getting more and more extravagant and expensive — even without standard travel. Since 2009, American consumer spending on holiday gifts and expenses has steadily increased. While fewer people are shopping in stores, e-commerce has captured an increasing percentage of holiday spending. Although the pandemic has resulted in a decrease in spending on travel, the average American spent $998 on gifts, holiday items, etc. in 2020 — according to Investopedia. To put this into perspective, in 2010, Americans planned to spend an average of $831 on the winter holidays.

Save Money Now To Avoid Debt Later

Regardless of your current debt situation (be it student loans, health bills, etc.), adding more debt during the holidays isn’t the goal. However, if you start saving now, you’ll be ready for gift purchases in November and December. Interestingly, only 42% of holiday shoppers claim they can pay their debt down in three months or less. What does this mean? That many shoppers will require months (or maybe even years) to pay down the debt they earned in a month’s worth of shopping. And with that, let’s chat about ways to avoid holiday shopping debt before it sneaks up on you.

steps To Create A Holiday Savings Plan

To begin, think about holiday spending the same way you would budget for other recurring, non-monthly expenses, like home maintenance. Be ready for the expenses in advance, and have money set aside via setting financial boundaries. In essence, you’ll want to funnel a small portion of each paycheck into a separate savings account to cover these upcoming expenses.

1. Define your holiday spending cap. To do this, think about how much money, realistically, you can save from each paycheck until December. That might look like $50/paycheck. If you have two paychecks in September, October, and November, you’re already looking at $300.

2. Make a list of everyone who you plan to gift. Be sure to include a miscellaneous group if you get asked to join a Secret Santa list, for example.

To read the rest of my post — including the full list of how to create a holiday savings plan — hop over to my feature on Canvas Credit Union’s blog.

All images are courtesy of Unsplash.