It seems like just yesterday we were all lounging in our swimsuits, hotdogs, and hamburgers sizzling on the grill, and fresh watermelon waiting to be devoured as we celebrated all that the summer months have to offer and now the holidays are upon us once again.
And while we’re all indulging in herb roasted turkeys and pie, our bank accounts will be experiencing a little indulgence of its own. Deck the halls with lots of money. Tis the season to shop, shop, shop!
Although there’s a special satisfaction that comes with finding that perfect gift, the holidays can be stressful, especially when you’re on a budget. How to find the perfect gift for your parents, siblings, spouse, children, and second cousins twice removed, all while staying within a certain allowance.
If you want to avoid the all too familiar stress that comes with this time of year, and enjoy the season with friends and family worry-free, check out these 5 tips on putting back a little extra cash throughout the year and leave that holiday budget fear behind you.
Lists, lists, lists
First and foremost, become friends with the list. Write down all of your expenses (and check it twice), everything from your monthly estimated power bill to the cup of coffee that you buy on your way to work each morning. Every last single thing that you spend money on each month needs to find its way to the money-spent list.
After you’ve written everything down, make a budget for only the essentials: bills, groceries, gas, pet supplies, medication, etc. If it’s a necessity, slap it on there. Talley up all of those expenses round up to the nearest dollar, and there is what you absolutely must spend each month. Subtract that money from your monthly net income and what’s left over is what you have to work with. And now comes the savings part.
Determine excess expenses
Ok, so maybe you’re a six days a week $5 Starbucks latte-lover, give or take a few bucks depending on how stressful a day it is and how many extra shots of espresso you need to make it to the weekend. Or maybe you just really hate cooking and prefer to eat out at least once a day, because it’s easier and seemingly more efficient.
While we’re all for treating yourself, maybe cut back to only a couple lattes a week, subbing in the others for a homemade coffee of your choice. Cut back to eating out only once a week, or once a month.
Now, take that excess money that you would have spent on those three extra cups of coffee or burger and fries, put it into a savings account of your choice, and watch those dollars start to pile up.
Establish savings goals
Say you’re saving an extra $100 a month after cutting out a few unnecessary expenses, but you really want to have closer to $1,000 set aside in six months, rather than $600.
First, make sure that your goals are realistic. Yes, we’d all love to have more than a couple grand stashed back by the end of the year, but sometimes it’s not feasible. And that is OK.
The trick to saving money, as is with most everything in life, is to work with what you’ve got. If you’re willing to completely cut out an excess expense to achieve a certain goal, then go for it, as long as your essentials are getting taken care of.
Just remember that life happens. The purpose of setting those goals is to have an incentive for savings, not to keep the money under lock and key.
If you have to dip into that savings fund to repair your car, it is going to be all right. That money is there to soften the blow of the twist and turns of life and make things a little less stressful when your son backs into the streetlight because he hit the accelerator instead of the brakes. Mistakes happen, and at least you’ll have peace of mind knowing that you have the money if you need it.
Decide where it’s going
With the most difficult part of pinching pennies behind you, here comes the delegating of those hard-earned monies.
Maybe you’re more of a free-for-all and want to have the lump sum available at hand for spontaneous trips, birthdays, holiday spending, nights out with friends, or any of those similar small joys in life. If so, keep on keeping on with your savings pile and move right along. However, for those of you who crave that nearly neurotic outlining, get out your calculators and start dividing.
Remember those lists you made friends with? Well, they’re making a comeback in the final steps of money saving. After you’ve started your savings, made your goals, and committed to the process, it’s time to decide what in the world you’re going to spend it all on.
You could go the percentage route and put 15 percent back for car repairs, 15 percent for vacations, 15 percent for the holidays, and so forth. Or you could split it 50/50: half goes toward emergencies, and the other half is free game.
Whatever your preference, determining what you’re going to do with that money once you’ve reached your goals will make the saving and dividing process that much simpler so you can spend (or not spend) without the stress, worry, and fret.
Congratulations, you are well on your way to conquering the penny-pinching beast! While it can seem daunting, remember to take it one step at a time. The end result is always worth it, especially when Christmas is only a month away and you have plenty of money set aside to buy all the presents you’ve spent the last 11 months of the year avoiding (don’t worry, you’re not the only one).
Enjoy the holidays, enjoy the extra cash, and may all of your saving dreams come true!