It seems like the holidays come faster each year. While this isn't actually the case, we can certainly feel more at ease and enjoy them more if we're better prepared. It may be August, but that's not too early to start planning for the holidays—especially if you expect to be spending a significant amount of money. Here are six reasons to get started.
1. You Can Avoid a Stressful Holiday Crunch
The holiday season can become quite stressful, particularly if you have a lot of people to entertain and buy gifts for. The longer you wait, the more stressful it becomes. It can also be more difficult to find the items you want, and shipping delays can add increased havoc. That's not to mention travel, get-togethers,
and other commitments you may have to make time and energy for. Why wait until the holidays are approaching to get started when you can give yourself months of breathing room? Early planning will give you time to set a realistic budget and pace yourself with buying. This way, you're also less likely to have to rely on credit cards that could lead to greater debt entering the new year.
2. You Can Utilize a Sinking Fund
It can be useful to set up a savings account and use it as a sinking fund to pay for your holiday expenses.
"A sinking fund is a personal finance strategy that helps you save money for a planned, future expense," explains Meredith Margrave at Zacks.com.* "It's perfect for holiday spending because it allows you to spread the cost over
several months, making it much more manageable. Here's how it works: Determine how much you need to save to meet your holiday spending limit, then break that amount down into weekly or monthly savings goals. By starting a sinking fund now (or even earlier for next year), you can set aside a little money at a time, avoiding the need to rely on credit cards when the holiday season arrives."
3. You Have Time to Put More Thought Into Gifts
The earlier you start your holiday planning, the more thought you can put into your gifts. If you wait until the last minute, you may feel the pressure to hurry up and buy something. Start thinking about it now, and you can come up with ideas that will really resonate with the recipients. If you are crafty, you'll have more time to dedicate to projects like handmade gifts. Otherwise, you'll still have
more time to research meaningful gifts for more people. You can order customized items online, which can take longer than regular items. Thinking
about it now rather than later will allow you to make sure you have plenty of
time before the holidays approach.
4. You Have Time to Prioritize
Starting now will also give you time to prioritize how you want to spend your holiday funds.
"Prioritize your spending," says Amy Miller at America Saves.** "Identify what’s most important to you. For some, it may be meaningful gifts, while for others it may be hosting family gatherings. Focus your plan on what brings you and your loved ones the most joy and cut back on less essential areas. Set a spending limit. Based on your current financial situation and future goals, determine how much you can reasonably spend this holiday season. Be sure to account for other expenses like bills, debt payments, and savings contributions."
5. You Have Time to Take Advantage of More Deals
By not waiting until crunch time, you'll be able to take advantage of more discounts and deals as they appear during the months leading up to the holidays. November brings Black Friday and other special deal days, but there will be plenty of sales to watch for in the meantime—without the mad rush that November days bring.
6. Travel Is Easier to Schedule
Travel is generally easier to plan for in advance. It's sometimes also less expensive. If you plan to travel during the holidays, why wait until the dates approach to scramble to find tickets and accommodations while everyone else is? Get your reservations locked in now while you can still get the airline tickets and hotel rooms you want. Lock in lower rates and avoid overbooked flights.
August may seem a little early to start thinking about the holiday season, especially as many of us are turning to back-to-school mode. Just consider all of the stress you'll avoid and the potential money you can save if you start your preparations now. Even if it's a little at a time, you'll thank yourself when the holidays get here.
** https://americasaves.org/resource-center/insights/creating-a-holiday-spending-savings-plan/