How to build your savings during the holidays

The holidays are, in general, a time of year when your possessions increase and your money decreases. For most people it’s probably just a given that you’re going to spend a lot of money during the holidays. You may even dip into your savings to cover of all those holiday-related expenses. One thing most people don’t do during the holidays – put more money in savings.

With all of that spending at the end of the year, is it even possible to bulk up your savings account during the holidays? Yes, it’s very possible. In fact, it’s even easier than you might think. The secret is reducing and redirecting.

A gift to yourself

All things being equal, you probably spend pretty close to the same amount on gifts every year unless your circumstances have changed significantly. So take a moment and review your spending over the previous few years. Now take that number, chop off 10 percent, and put that 10 percent into savings.

Voila! See, I told you it was easy.

Ok, so now you’ve got less money for gift giving. Your buying power has been reduced, but your giving power remains intact. How do you give more and spend less?

  • Regifting – It’s not a dirty word, especially when you’re giving someone something they need/want/value. Thoughtful regifting is much better than thoughtless gifting.
  • Homemade – I’m an adult. I don’t need a lot of stuff. I’d much rather get a box of homemade cookies than an expensive gift that was given just for the sake of buying a gift. Use your talents and skills to create something unique and memorable, or at the very least delicious.
  • Time – You can actually give your time. People don’t tend to think of their time as valuable, but it’s actually completely irreplaceable. Every moment of your time, once spent, is gone forever. That means something. So give your time in a way that adds value.

Bank the leftovers

The gifts aren’t the only part of the holidays that can put a hurting on your bank account – November and December are a feast friendly time of year – lots of variety, lots of dishes, lots of leftovers.

Not this year. This year you’re going to reduce your food spending and redirect that money into savings. Here’s how you can do that:

  • Cut down on the options – I’m a fan of food, so I love having five cookie choices and three pie choices and eight appetizer choices and so on. But you know perfectly well that some of those options are quickly demolished and some of those options stick around into the first couple weeks of January, waiting to be humanly disposed of. Set “tradition” aside for a moment and cut back on your food offerings.
  • Potluck it – If you’re the holiday host, the food bill is going to be rough. Make it a group effort and turn your holiday gathering into a potluck. Every course you don’t have to prepare is another deposit you can make into savings.

Of course the holidays are more than just gifts and food – there’s decorations and plane rides and mall Santas and all kinds of other places to spend your money. Look at every cost as an opportunity to build your savings. Reduce where you can and push that money into savings. You’ll still have a happy holiday, but you’ll have an even better New Year.

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

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