Along with good cheer, the holidays
bring so many expenses--Christmas parties, travel, decorations and groceries. Without a holiday budget this can get out of hand because all that is on top of holiday gifts
, of course! No wonder many Americans sink further into debt during the holidays--something that many work-at-home moms can't afford to do.
So set a holiday budget and a savings goal and get started saving for Christmas as early as possible. By setting a holiday budget and paying upfront, you avoid that post-holiday credit card hangover. The earlier you start, the bigger the nest egg. And by avoiding holiday debt, these can strategies work with your long-term goal of building your savings.
These five savings strategies can help you save for the holidays and avoid holiday debt. Obviously the farther off the holidays, the more you'll save. But every little bit helps, and it's never too late to cultivate good financial habits.
1. Set up a holiday savings account.
Have part of your paycheck direct deposited into a separate savings account that is solely for the purpose of saving for the holidays. Or, if you don't get regular paychecks, set up an automatic transfer to the savings account. If you are a born spender, note the extra precautions to keep yourself from breaking in to your piggy bank prematurely. Spenders:
Don't get an ATM card with your savings account. A trip to the bank will slow any impulse withdraws. Or, consider joining a Christmas Club. Many banks still offer these old-fashioned accounts in which an automatic deposit accumulates over the year and the bank cuts you a check in November.
More from About.com's Money in Your 20s Guide: Christmas Clubs
2. Bank money you are owed as it's repaid.We often don't think too much about the little sums of money we are owed by various sources, until the cash lands in our hands. Resist the urge to spend this money and instead make a habit of saving rebates from retailers (even if they are only a few dollars), refunds from utilities or insurance companies, reimbursements for expenses, repayment of other debts and other unexpected windfalls.
For self-employed work-at-home moms, this strategy can be applied to payments for unexpected jobs. Or even resolve to set aside all the income from one client.
3. Give up something.Giving up one of your little luxuries in order to buy a gift for someone else is a noble gesture. Set aside what you would spend on your daily latte or Friday night pizza or something that you're much better off without anyway, like cigarettes. This strategy may be best left for the last few months before the holidays because you may not want to give up your little indulgence forever (unless it's smoking!).
Spenders: The most practical way to recoup this cash is to calculate how much you spend on this item, and then deposit that amount into your holiday fund in advance, preferably on a weekly basis.
4. Count your pennies…literally.Empty your pockets or purse daily into a change jar. Use collected change to start your holiday fund. If you use a change counting machine, you'll pay a commission. Instead let the kids roll it and pay them the commission. It will keep them busy, and give them extra spending money for the holidays (something they might ask for anyway!).
To increase savings, don't hand over a penny when the total ends in $.01. Take the $.99 and add it to your jar. If you make cash withdraws on a regular basis--every payday or each weekend--add any leftover cash at withdraw time to your change collection.
Spenders: Keep any cash you want to set aside in inconvenient denominations--large bills, change or dollar coins--until you can get it in the bank.
None of these options pay much, if any, interest. But neither does cash that's burned a hole in your pocket. And the idea is to keep you from paying interest on your credit cards later.