Posted By
By Hari Subramanian
Special to the Financial Independence Hub
Knock knock! Who’s there? Holidays! Holidays who? Holidays that make your savings go boohoo! The holiday season is upon us. Thanksgiving is just around the corner (Nov. 28th in the US) and before you know it, people will be lighting the Christmas tree again.
I don’t mean to be a party pooper, but the holiday season can make a large dent on your savings and could even leave you with a sizable credit card debt. Constantly worrying about your dwindling bank balance can dampen your festive spirit. Thankfully, there are a few frugal ways to ensure that your savings don’t take a hit while you enjoy the holidays with loved ones.
Plan the holiday budget and stick to it
Sit down with your family and make a list of all the things you need to buy for the holidays: food, drinks, sweets, decor, party accessories, gifts and more. Don’t forget to include an estimated cost for every item on your shopping list. Cut down on a few things if you feel that the budget is overshooting the acceptable expense limit. Now comes the difficult part: once the holiday budget is ready, try and stick to it as much as you can. Use budgeting apps like Mint that allows you to set a budget, track your expenses by linking to your debit and credit cards, and notify you when you are about to exceed your budget limit.
Go easy on the sale
Come holiday season and a barrage of online/offline sales line up to woo consumers by offering competitive discounted pricing. Black Friday sale, Christmas sale, and Boxing Day sale are ready to pounce on us with massive discounts. Before you hop on the sale-crazy bandwagon, put your credit card aside and think about whether you really need those pair of boots or the new iPhone. Once you compartmentalize your wants from your needs, you would eventually go easy on the sale. Let necessities and not sale pricing be the driving force for shopping.
Rewards card to the rescue
Christmas rings an ominous bell for credit-card debts. While shopping excessively on credit cards could spell doom, not all credit-card expenses are bad, especially if you have a credit card that dishes out good rewards or cash back. A smart way to use credit cards is to accumulate reward points throughout the year and redeem them during holiday shopping. If your credit card gives you good cash back returns when you purchase at a specific store, ensure that you do a bulk of holiday shopping from that store.
Secret Santa and DIY decorations
Exchanging gifts are an integral part of the holiday season. But buying gifts for your entire clan can cut a hole in your pocket. That’s why I love the tradition of Secret Santa. It not only creates the mystery around who got who but also saves a lot of money. Apart from gifts, people spend a lot of money decorating their houses for Christmas. This year, ditch the expensive decorations and embrace DIY decor. Youtube is brimming with cool DIY videos that would help you make the decor at home and saves you a ton of money.
Look out for discount deals
Not just retailers, but even banks, insurance companies, and financial institutions roll out discounted deals during holidays that could save you money in the long run. Instead of going gaga over a Black Friday sale, keep your eyes open for auto insurance or home insurance deals with a low premium and more coverage. Also, keep checking for coupons and promo codes on websites like Groupon, Red Flag Deals to get a cheap deal on tickets for events happening around your city.
Start building your holiday savings for next year
Last, but not least, stash away a little money every month to build a holiday fund for next year. It might be too late to start saving for the holidays this year, but you can always save for the year after. You could build sizable holiday savings by putting aside just 5% of your paycheck every month.
With just days before Thanksgiving, it’s time to sit down with a pen, paper, and calculator (I’m old fashioned!) to chalk out the frugal plan for saving money this festive season.
Hari Subramanian is a Digital Marketing Executive working with LowestRates.ca, a leading Fintech company. He loves watching horror movies and likes experimenting with food.
