Time to Heat it Up for the Holidays

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Sure, at this point in the year, your A/C bill may be a bigger financial concern than planning and preparing for a holiday season that is still – seemingly – far in the future. However, some focus and work now can avert a lot of stress when the holidays do finally roll around. And I don’t know about you, but I’m not looking for any additional stress this year. 


In fact, I’m thinking just the opposite. A blowout celebration may be in order as life seems to be shifting back to something that approaches life as we knew it before the pandemic. However, here I’m focused on one part of the old business as usual that I hope you’ll avoid: Holiday overspending and the resulting debt hangover.  


There’s still plenty of time to make the 2021 holidays a debt-free endeavor. And that’s true even if you plan on doing a little catching up by supersizing your plans for this holiday season.  


Here are six steps to make 2021 a truly re-energized holiday season: 


Buy strategically:  There’s nothing like spreading your spending throughout the year to lessen the financial impact. Snatch that cool outfit your daughter wants that’s on sale in July and tuck it away. Knock out a couple gifts during back-to-school shopping. You get it.  Spread it out over the next five months or so and imagine getting to Black Friday and feeling no pressure at all—just a few stocking stuffers and you’re done. There is a bit of risk with this techniquewith nearly a half of a year left, make sure you don’t forget where you hide the gifts 


Skip-a-meal-out: This is a tough one for me. It’s been pretty darn exciting to get back out and sample some (okay, many) of my favorite places. But if you need some motivation to cut back on the one of the biggest money drains for families, envision fantastic holiday – trips, gatherings, gifts and family – and a zero balance on your January credit card statementSo, instead of taking the whole crew out to dinner, skip the meal out and take what you would have spent and tuck it away in an envelope or in your savings account to be tapped at the holidays.  


Cut-save-and-stash: Use that same concept of squirreling away what you would have spent on your next trip to the commissary or grocery store. Clip those coupons and stash the savings or do the same with deliberate decisions to leave a purchase on the shelf. 


Loose Change: This used to be a big deal at my house. However, since we are using less cash, the 5-gallon water jug we used to use has been replaced by a couple Mason jars. But the idea still works. There are also a number of round-up apps that can help you consistently save for the holidays. Before you know it, little by little, the savings can add up.  


Pay for the holidays first: Set up a savings account, name it “Holiday Fund,” and re-frame the solid concept of pay yourself first. An automatic transfer each pay period into an account specifically for the holidays could provide you the boost you need.   


Plant the seeds. Do all the members of your extended family, friends and neighbors need gifts? Probably not! Start talking now about limiting gifts, now. Coming out of the pandemic, my guess is that these conversations will be well-received. Consider drawing names or swapping services as an alternative to pricy gifts. Get everyone on the same sheet of music early and you’ll avoid hurt feelings and financial stress. 


I don’t have the corner on creative or imaginative ideas, so don’t limit yourself to these thoughts, but do leverage my general theme...start putting yourself in position to celebrate the holidays in a way that makes financial sense.  


What are your thoughts? Will you plan ahead for holiday spending, or is Christmas in July not your thing? Please share in the comments! 


About the Author: JJ Montanaro is a Certified Financial Planner® professional and part of the Military Affairs team at USAA. He’s a graduate of the U.S. Military Academy and has over 20 years of financial planning experience.