Planning Ahead For Holiday Spending

The holidays are fast approaching and bring with them a slew of parties, family gatherings, gift giving, and travel. While this is an exciting time of year for most Americans, holiday spending can take a heavy toll on your finances. According to the National Retail Federation, retail spending is expected to increase as much as 3.5 percent this holiday season. Add that to the higher prices you’ve been seeing at the grocery store and gas station, and you can certainly expect this holiday season to make an impact on your budget.

Holiday budgeting is an important step in preparing for this time of year. Planning your spending and aligning it with your financial goals can help prevent starting the new year in a financial slump. At FVSBank, we know how hard it can be to balance holiday fun and fiscal responsibility. Here are our tips for getting the most out of the holiday season without breaking the bank.

Prioritize Your Expenses

Before you make a holiday budget, you’ll want to list all your known expenses for the coming months. Spending on gifts, groceries, travel, and winter home maintenance increases this time of year. Take a look at your calendar and note any trips or special occasions that will add to your monthly expenses. If your plans are similar from year to year, look back at last year’s spending for a rough estimate of the amount you will need to budget this winter.

As a Wisconsin resident, you can’t avoid winter-related home costs. Increased heating bills and winter home maintenance can take a bite out of your holiday budget. It’s important to prioritize these housing expenses over gift giving and holiday entertaining.

Make a Holiday Budget

If you aren’t already using a monthly budget to track your spending, now is a great time to start. Making a budget is simple – sticking to your budget is harder. A typical monthly budget takes your net income and divides it amongst your expected spending categories. Most months these categories will include:

• Mortgage or Rent
• Utilities
• Insurance
• Gas
• Groceries
• Entertainment
• Savings
• Debt Payments

Your holiday budget needs to account for your normal spending plus the winter expenses you calculated earlier. If you can’t find room in your budget for your holiday spending, protect your financial health by reconsidering your holiday plans and decreasing the amount of money you will spend on travel and gift giving this year.

Budget for Savings

As you make your monthly budget, don’t forget to allocate money for saving as well as spending. With convenient digital banking services from FVSBank, you can schedule monthly transfers from your checking account to your savings accounts. Set aside money into short-term savings accounts to help fund upcoming vacations, pay for new appliances, or buy a new car.

Long-term savings goals should also be budgeted for each month. Budgeting for a mortgage is a great long-term goal. Whether you need to save money for a down payment on a new Wisconsin home or build a fund to help with future mortgage payments, growing your savings account is easier with a budget. Need help planning for your first mortgage? Speak to local FVSBank lender to plan a mortgage timeline.

Find the Funds You Need

If fitting holiday spending into your monthly budget seems impossible, consider working extra hours or picking up a side hustle to increase your cash flow. While dipping into your short-term savings accounts will come at the expense of your other savings goals, it’s a better solution than racking up credit card debt this winter. Don’t borrow from your retirement savings this winter. It’s better to have a frugal holiday season than damage your long-term savings plan. If you need help covering important winter spending, consider applying for a personal loan. In most cases, the interest you pay on a personal loan is much lower than credit card interest.

You may be surprised by the room you can make in your budget by simply cutting back on unnecessary spending. Make a detailed list of your monthly spending and see if you can eliminate any of these common expenses:

• Rarely used gym memberships
• Streaming services
• Monthly app subscriptions
• Impulse shopping
• Restaurant spending

Get Rewarded

How you pay for your holiday purchases matters. While paying with cash or debit is the easiest way to stay within your budget, paying with a rewards credit card will help put a little money back in your pocket this winter.

You can’t avoid holiday expenses so why not get a little something back for yourself? Paying with a rewards credit card means that you earn points for each dollar you spend this season. At FVSBank, our personal Visa credit card maximizes cash back and protects you from fraud all year long.

Plan Ahead for Next Year

Avoid the stress of last minute holiday budgeting by starting next year’s planning in January. Take the amount you spent on the holidays this year or average your holiday spending from the last three years. Divide the total amount you need for next year’s holidays by twelve months and start saving little by little over the year. If your goal is to have $1,200 to spend next winter, you need to save $100 a month starting in January.

With a Holiday Club Account from FVSBank, you’ll earn competitive interest on your savings with no maintenance fees. Since your funds can’t be withdrawn before mid-October without a penalty, you can avoid the temptation to dip into your holiday savings earlier in the year. A six-month CD is another good option for locking away savings until the holiday season.

Let’s Make Your Holidays Bright

At FVSBank we offer a variety of savings accounts to help you choose the right fit for your holiday savings goal. If you have questions about budgeting, saving, or personal loans, our friendly team members are here to help you manage your holiday spending.

Open a holiday savings account today! Stop by one of our local branches in Waupun, Fond du Lac, or Oshkosh or give us a call. We are here to help you navigate saving and budgeting this holiday season and throughout the year.