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An article from Gallup reports that Americans were expected to spend, on average, more than $1,000 during the 2024 winter holiday season. As this winter’s festivities are just on the horizon, it makes sense for many shoppers to start thinking about their expenses.

Staying on top of your finances, while also making room for the holidays, can feel like a tall order. However, that doesn’t mean you can’t spare some cash for gifts, travel, and cheer.

With a little planning and creative execution, it’s possible to celebrate the season in your special way. Let’s go over a few ways you can prepare for holiday spending this year.

Make a Budgeting Plan for the Season

Sometimes, the best advice is to go back to basics. In this case, it may be a good idea to draft a budget and savings plan in anticipation of the holidays.

Having a holiday budget in place now has many advantages, including:

• It outlines a concrete savings goal.
• Helps anticipate expenses.
• Contextualizes what you need to do to prepare.
  

A budget also empowers you to define boundaries and inform your holiday plans. It helps curb overspending.

Budgeting for the holidays is as simple as revising your current budget. To get started, take a moment to list your income and expenses, categorizing them as needed. Separate needs from wants, and allocate your resources accordingly. One effective model is the 50/30/20 rule, which divides a budget into three categories: living expenses, wants, and savings.

Set aside a portion of your budget for the holidays, and then predict how you might spend money allocated here. You can separate your holiday budget into sub-categories, like: 

• Gifts
• Travel
• Lodging
  

Now that you know where your money is going and where it should be, you can tailor your savings to meet those goals. We’ll go over some strategies now.

Start a Dedicated Savings Account

Sometimes, it helps to split your savings among separate accounts. The benefits of having multiple savings accounts include:

• The ability to get a clearer picture of your savings progress.
• Having a visible barrier in place to discourage impulse purchases.
• Separating your money into purpose-built categories: needs, wants, etc.
  

If you use technologies like online banking or mobile banking apps, then it’s easy to get snapshots of your savings progress and available funds.

After setting your holiday savings goal, find a dedicated place to transfer the cash you intend to save for this occasion. You can open a new savings account with your financial institution and store your holiday funds there.

Try an account dedicated to savings, where you can only access the money through transfers. Accounts that come with checks and debit cards might make it too easy to tap into this fund unnecessarily.

Now that you have a holidays-focused account, let technology work for you. Make arrangements to automate your savings. Arrange automatic transfers from your everyday account to this holiday account.

You can set the intervals to coincide with your payday, making transactions a seamless process.

Finally, do periodic checkups between now and the lead-up to the holiday season to verify you’re meeting your savings goals. This will allow you to make adjustments to your current saving and spending habits.

Give and Celebrate Creatively

The holidays are a busy time of year. Consequently, it's easy to lose sight of what truly matters. The reason for the season will be different for everyone. Through all this, it’s a good idea to keep your friends and family in mind during all the festivities. This time of year is best spent with others, after all.

While you’re working through your holiday savings plan, be sure to check in with your circle to coordinate your efforts. Having a chat with relatives and friends can do wonders for keeping your budgeting efforts in perspective.

Additionally, it may be beneficial to discuss your budgeting plans more openly. Having candid discussions with acquaintances may present opportunities that lead to mutually beneficial outcomes. Talking things out might help keep holiday spending manageable, not just for you, but also for your friends and family.

Here are some ideas you can share to get things started:

• Arrange a potluck instead of putting hosting and catering duties on one party.
• Propose a secret gift exchange and place a spending cap on items.
• Pool resources amongst friends to book (and travel to) a single vacation rental.
• Host a party focused on experiences (caroling, board games) instead of gift-giving.
  

While spending money may be unavoidable this holiday season, remember that it is a means to an end. Often, it’s the experiences we share and memories we make that define this time of year. When you keep the spirit of the holidays in mind, you might pursue your holiday savings goals with renewed interest.

First Florida helps you stay on track with your budgeting goals. Try out one of our savings accounts to keep your finances organized. Explore our website to learn more.