For most of us, the holiday season plays out the same way every year. By the time November rolls around, the calendar is packed, prices are high, and that overwhelming feeling starts creeping in. Gifts are bought in a rush, travel gets booked at sky-high rates, and we promise ourselves we’ll plan earlier next year.
Then, January arrives. Right when we’re setting New Year’s resolutions to better our finances – save more, eliminate costly debt, improve our credit scores – the holiday credit card bills arrive in the mail.
The whole scenario can feel defeating. However, it doesn’t have to be this way. With a little preparation now, you can spread out costs, avoid the last-minute stress, and enjoy the holiday season without debt hanging over your head in the new year.
The High Cost of Last-Minute Holiday Cheer
Between travel, decorations, gifts, parties, and hosting events, the cost of holiday cheer piles up fast. When you’re left scrambling to pull off another memorable season for friends and family, you’re more likely to turn to high-interest credit cards, costly payday loans, or Buy Now, Pay Later offers.
But it’s not only these expensive financing options that set back your wallet. Other factors come into play that affect your budget and stress levels, including:
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Travel Costs Skyrocket: Flights, hotels, and even rental cars typically become more expensive as peak dates approach.
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Gift Budgets Get Stretched: Rushed shopping often leads to overspending just to cross names off your list.
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Impulse Purchases Creep In: Limited-time sales and shopping under pressure make it harder to stick to your lists and budget.
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Debt Follows You into the New Year: Balances from December can take months to repay, cutting into your ability to work toward other goals in the new year.
Instead of waiting for the holiday season to arrive, planning ahead allows you to remain in control – both financially and mentally.
Why Starting Early is a Game Changer
Starting early doesn’t mean buying gifts in August or having every detail finalized months in advance. It simply means giving yourself time to prepare so that the season feels more organized and less expensive.
With extra time on your side:
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You Spread Out Costs: Saving and shopping gradually is easier on your wallet than spending a big chunk of cash in one month.
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You Shop Smarter: More time means you can track prices, hunt for deals, and compare options more thoroughly to avoid overspending.
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You Eliminate Stress: Knowing your budget is in place means you can focus more on enjoying the season instead of worrying about the bills.
The best part about getting started early on your holiday plans is that it doesn’t require much work or sacrifice on your part.
Step #1: Estimate Your Total Holiday Costs
Before you start saving, you need to know what you’re saving for and how much to set aside. Make a list of all your expected expenses, including:
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Travel: Flights, hotels, rental cars, gas, or pet boarding.
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Gifts: Make a list of people you plan to buy for and set a spending limit for each person.
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Decorations: Lights, ornaments, and a 15-foot inflatable snowman for your front yard!
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Food & Entertaining: Holiday dinners, party décor and supplies, or gifts for the host.
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Clothing: Outfits for events, family photos, or themed parties (Ugly sweater contest? Yes!)
Once you have your list, tally it up. Don’t be surprised if the total is higher than you expected – holiday spending has a way of sneaking up on us.
Step #2: Break It into Bite-Sized Savings Goals
Now that you know your target number, divide it by the number of weeks or months until you need the money. For example, if you expect to spend $1,000 and you have 16 weeks until mid-December, that’s about $62.50 a week.
The best part of this strategy is that you’re building your holiday funds gradually, instead of one large withdrawal before Black Friday or early December. If you can, set up automatic transfers or payroll deductions to put your savings on autopilot.
Step #3: Start Shopping Early
Yes, it can feel weird shopping for the holidays in August or September – the hot toys or gifts might not even be out yet. But you can start buying smaller gifts, stocking stuffers, hosting supplies, or items that never go out of style.
Spreading purchases over several months keeps your spending more balanced and reduces pressure come December. Plus, as a bonus, you’ll avoid the hectic holiday crowds!
Step #4: Lock in Travel Deals Now
If travel is part of your holiday plans, start shopping for flights and hotels early. Prices always skyrocket the closer you get to peak travel dates. Booking travel now could save you hundreds of dollars, and, if you use a credit card, you have several months to repay the balance.
Plus, when planning travel ahead of time, you can set up price alerts and notifications for your favorite airline and hotel websites – providing more options to save.
Step #5: Create Your Gifting Plan
Even if you’re not buying presents yet, decide what you plan to give each person and set a firm spending limit. This strategy will help you:
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Avoid overspending or making impulse purchases.
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Shop with intention – not panic.
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Take advantage of sales when they pop up.
If you have children, ask for their wish lists early so that you can compare prices over time and avoid any sudden price hikes or out-of-stock pitfalls.
Bonus Tip: Leave a little wiggle room in your budget for unexpected or last-minute gifts, such as a bottle of wine for the host of a party you’re invited to attend or an office holiday gift exchange.
Step #6: Adjust Your Current Budget
If your budget is already tight, look for small changes that can help you free up cash, such as:
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Reduce how often you dine out for a few months.
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Pause or cancel subscriptions you rarely or no longer use.
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Sell items you no longer want or need. Social media marketplaces are a great way to offload old toys, clothes, or other items so you can make room for new holiday gifts.
Even small changes to your budget can add up quickly, especially when the savings take place over several months leading up to the holiday season.
Step #7: Start the New Year Without Holiday Debt
The biggest payoff to starting your holiday plans and saving now? You can welcome the new year without a stack of high-interest credit card bills waiting for you. Instead of scrambling to pay off holiday debt, you can focus on other financial goals, such as saving for a vacation, building your emergency fund, or just enjoying a stress-free start to the year.
If you know that you’ll need financial support to cover the season’s higher costs, consider a holiday loan.
Holiday Loans offer various perks that are worth a look:
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Lower Rates: Most holiday or personal loans offer lower interest rates when compared to traditional credit cards – allowing you to avoid high-interest charges in the new year.
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Fixed Rates: Holiday loans generally have fixed rates, meaning your rate and payment will remain the same throughout the term of your loan – unlike most credit cards that have variable rates and can increase suddenly.
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Set Repayment Terms: Credit cards allow you to make only a minimum monthly payment. This feature enables you to draw out the balance over a long period – meaning you might be paying off your sister’s holiday present still by next summer!
Holiday loans instead have set payments that help you pay off the debt much faster and avoid costly interest charges.
We’re Here to Help!
The holiday season is meant to be a time of joy spent with family and friends. However, too often, it becomes overwhelming and a financial drain. Spending a little time now preparing can make a world of difference – both for your wallet and mental health.
If you’re ready to get started on your holiday savings plan and want to open a savings account for holiday funds or have questions about personal loans, we’re ready to help. Please stop by the Credit Union or call 410-687-5240 to speak with a team member today.