When kids returned to school this week, I suspect you were as shocked as I was. How did the summer fly by so quickly? Knowing that the busyness of school and work will accelerate life even more, I decided to look ahead.
I turned my calendar to the holidays. We have only 126 days until Christmas and 98 days until the start of Hanukkah. Even though you may not be finished with back-to-school expenses, now is the time to think about budgeting for the holiday season. Yes, it really is.
The typical U.S. family spent about $850 on the holidays last year, according to the American Research Group. If you were to budget and save throughout the year, you would need to save $71 a month to achieve that goal.
You haven’t been setting aside that $71 a month? Here’s a plan to prepare you for the holidays or for any future expense.
You’ll be saving a portion of your holiday money each time you get paid during the next 16 weeks. First, consider how much discretionary money you have during that time.
Next, plan your holiday experience by creating a budget for meals, parties, gifts and charitable donations. Compare this total to how much you can easily save. If it’s less, you’re in the clear.
If the amount you budgeted exceeds the amount you can easily save, something has to give. Either you need to cut back on your holiday expenses or you need to cut back your spending now so you can have what you want later. This is the essence of budgeting and planning.
Some ideas to consider if your budget was in the red:
Remove a few luxuries from your monthly budget until you reach your goal.
Consider selling some items you no longer need. Ebay, Craigslist and fall garage sales are quick ways to turn unwanted items into cash.
Apply for a part-time job this fall. Businesses may be adding staff members to meet holiday demands.
Once you start saving, you need to keep the money safe. Temptation and easy access to your savings can thwart a good plan.
Your parents or grandparents may have had a Christmas club account at a local bank or savings and loan where they deposited a bit of money each week to use at holiday time. This simple and effective method of building a nest egg can work for any goal.
Christmas club accounts reached the height of their popularity in the 1970s. They were simple savings accounts with restrictions that encouraged regular saving and infrequent withdrawals.
Today, with $100 saved, you can open a separate account to serve as your own special savings fund – whether it’s for the holidays, a vacation or any other savings goal.
School has begun, signs of autumn are in the air and, before you know it, the holidays will be upon us. Begin saving today.
matt.kelly.durango@gmail.com. Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance. www.personalfinancecoaching.com.
