Between gifts, traveling and food, the most wonderful time of the year can also be the most expensive. In fact, many Americans estimate that they’ll spend about $1,000 on gifts and other expenses during the holiday season. Regardless of your festive spending goals, here’s how you can prepare as the gift-giving season approaches.
Read more: Use Ally Bank’s buckets and boosters to save for holiday spending
How to save for the holidays
Whether you plan to spend $1,000 or $100, here’s what to consider to meet your goals and reduce holiday spending stress.
Set clear financial goals for each holiday spending category
Start by thinking about how much you want to spend this season. Then, consider what you’ll be spending that money on. Create a spending list by category that looks something like this:
Gifts
Decorations
Travel
Meals
Parties or hosting
Donations
Once you have a broad outline, you can start setting specific amounts for each category. For example, maybe you’re not traveling far and want to allocate more money toward gifts or decorations. With Ally Bank's savings buckets, you can create a bucket for every category and set savings targets for each one, so you can track your progress throughout the season as you save within a single account.
Look for additional ways to reduce expenses
Now's a good time to identify areas within your budget where you could cut back and reallocate the extra funds toward the holidays. That could look like:
Redirecting the money you’d spend on food delivery or dining out
Canceling or pausing a few subscriptions to free up some cash
Evaluating your non-essential spending — can you switch to home-brewed coffee or rent movies from the library?
Create a plan with the help of Ally Bank Savings Account buckets
After making a comprehensive list of potential spending categories and finding ways to save, it’s time to build a holiday savings plan into your budget. While there are a variety of strategies out there, you could get started with these steps:
Break your overall goal into monthly increments. For example, if you know your total spending will be about $1,000, aim to save $250 a month between September and December.
Determine where the funds will come from in your budget.
Add what you save each month to your different holiday buckets, prioritizing by which categories are most important to you.
Track your progress and watch your buckets grow as you reach your goals.
Other ways smart savings tools can help you reach your goals
In addition to buckets, Ally Bank Savings Accounts and Spending Accounts, offer access to key features that can boost your money-saving journey:
Recurring transfers: Take saving off your to-do list by automating deposits into your Ally Bank Savings Account.
Surprise Savings: When you link your checking and savings accounts, we can analyze your spending patterns to find extra cash that could earn you more in savings.
Round ups: This booster rounds transactions from your Ally Bank Spending Account to the nearest dollar, then transfers them to your Ally Bank Savings Account once you’ve accrued $5.
For a more interactive look, use our savings goal calculator to see how long it would take to reach your savings goals:
Enjoy the holidays without financial stress
By taking the time now to start saving money for the holidays, you can be sure the months ahead will be merry and bright — without taking an unexpected toll on your wallet.
