It seems department stores start stocking up for the holidays as soon as Labor Day is over. If you’re like me, you find it annoying to see decorative Santas as early as September. But believe it or not, the holidays are finally here.
So what if your savings haven’t exactly caught up? With gifts, gatherings, parties, and holiday travel, it will be tough to stay on top of your student loan payments and not go into further debt without a plan in place.
Here are three steps you can take to get your budget in shape for the holidays.
1. Save for Holiday Spending Aggressively
The first step in avoiding the holiday debt trap is by saving now. It might be difficult to save a lot in just a few weeks, but remember, that money can help offset holiday travel costs and soften the blow of an unexpected white elephant gift exchange. Look for ways to temporarily cut expenses, such as freezing your gym membership or going on a fiscal fast.
To help you commit to saving, consider opening a targeted savings account with an online bank like Capital One 360, or using a tool such as Digit or SmartyPig. These options can take the leg work out of saving and automate the process so you don’t have to think about it.
2. Be on the Lookout for Cheap Holiday Travel
I’m pretty savvy when it comes to finding good travel deals. I know that booking flights on a Tuesday and traveling during the week can score me significantly cheaper flights. However, during the holidays, almost all bets are off.
It’s an insanely popular time to travel and prices go up due to the demand. Airlines know people will be flying because of the holidays, and in my experience, flying during that time can cost almost double what a normal flight would.
If you have to travel during the holidays, here are some tips to get the best holiday travel deals:
- Book early. Prices only get more expensive closer to the holidays. If you know you’re traveling, don’t wait to book a flight.
- Consider traveling on a holiday. I’ve flown on Thanksgiving and Christmas day and saved close to $100.
- Fly when no one else wants to: Early morning and red-eye flights are usually cheaper.
- Compare prices among airlines: Try sites such as Orbitz, Fly, and Kayak.
- Watch out for baggage fees. Sadly, baggage fees are becoming commonplace. Read the fine print and budget for baggage fees.
- Check the train or bus routes. If your destination isn’t too far, see if a train or bus would be cheaper than flying. Usually these can be pretty scenic and relaxing.
- Use travel rewards if you have them. Just watch out for black out dates.
3. Give Frugally
The holidays are a great time to reconnect with family and friends. However, many people feel they have to spend a lot of money on others just to show they care.
There’s a better way. Here are some ways to give frugally and avoid holiday debt:
1. Write a letter. When is the last time you received a handwritten letter? It seems all we get in the mail these days are bills, so it’s nice to receive a handwritten note from someone letting us know they care.
2. Give a voucher. Why spend money when you can give what you already have to offer? For example, create a voucher for one night of babysitting for a busy mom, a night of movies and drinks for a friend, or a I’ll-do-that-chore-I-know-you-hate-to-do for a loved one. These vouchers can be practical or fun — but best of all, they’re free.
3. Set a spending cap. Have you ever felt like you weren’t sure how much you should spend on each person? Make it easy and set a budget limit that is the same for everyone. Maybe it is $10 or $20, but don’t spend more than that on each person if you decide to buy gifts.
4. Buy things on sale. I’m an advocate of looking for sales, but that doesn’t mean you should buy something simply because it is discounted. A sale is not an excuse to spend, but if your desired item is on sale, snag a deal and move on.
The holidays are right around the corner and by preparing now, you can stay true to your financial goals and debt repayment while still enjoying yourself.
No one wants to take on more debt during the most wonderful time of year, so prepare now to avoid regret in January.
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